In short

AMIL sued its former director Mr Wilson, Mr Ashfield and Avman for diverting aircraft maintenance contracts to a rival company.

The judge found breaches of fiduciary duty, dishonest assistance and conspiracy, but dismissed related Globespan money claims.

Wilson, Ashfield and Avman were held liable; quantification of compensation was reserved.

Decision

AMIL's main claims against Wilson, Ashfield and Avman granted in part. [200]

Issues

Did Mr Wilson breach fiduciary duties by procuring Avman to take contracts meant for AMIL?
Yes. He dishonestly diverted business opportunities belonging to AMIL. [198]
Was Avman liable for knowing receipt and dishonest assistance?
Yes. Wilson's knowledge was imputed and Avman received trust property in breach. [199]
Should AMIL recover the Globespan sums from Mr Wilson?
No. The Globespan claims were dismissed. [240]

Reasoning

AMIL would have had an 80% chance of securing the Romaero and Galaxy contracts but for the diversion. [219]

Written by AI from the judgment on 20 August 2026. Each ¶ links to the paragraph it came from. Read those before relying on it.

▶Statutes Cited1

▶Case Law Cited13

▶Cited By26

Aerostar Maintenance International Ltd & Anor v Wilson & Ors [2010] EWHC 2032 (Ch)

Case No HC08C00994

[2010] EWHC 2032 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 30/07/2010

Before

MR JUSTICE MORGAN

Between

(1)AEROSTAR MAINTENANCE INTERNATIONAL LIMITEDClaimants

(2) COMMERCIAL AVIATION SERVICES LIMITEDClaimant

CHRISTOPHER WILSONDefendants

JEFFREY ASHFIELDDefendant

AVMAN LIMITEDDefendant

JOANNE HARRISSDefendant

Ms Linden Ife (instructed by Lamport Bassitt) for Claimants

Mr James Ramsden (instructed by Trowers & Hamlins LLP) for Defendants

Hearing Hearing dates: 16 th, 17 th, 18 th, 19 th 24 th, 25 th, 29 th& 30 th March 2010

Judgment

PART I: GENERAL MATTERS

[1]At the times which are material to this claim, Mr Wilson, the First Defendant was a director of Aerostar Maintenance International Limited (“AMIL”). It is said that he committed a serious breach of his fiduciary duty as a director, by diverting from AMIL to a newly formed company a business opportunity that belonged to AMIL. Accordingly, AMIL claims against Mr Wilson primarily for breach of his fiduciary duty as a director. The claim is also put on other grounds.

[2]AMIL also claims against the Second Defendant, Mr Ashfield, and the Third Defendant, Avman Limited (“Avman”), as being accessories who acted together with Mr Wilson in relation to his wrongdoing. The claims against the accessories rely upon the principles as to accessory liability in equity and also in tort.

[3]The claims described in the last two paragraphs are referred to in this judgment as the main claims, to distinguish them from what are called the Globespan claims. In relation to the main claims, I am asked to determine issues as to liability and causation of loss and damage. I am not asked to deal with questions of quantum, whether pursuant to the claimed order for an account of profits or pursuant to the claim for equitable compensation or damages. It is right to note, however, that the Defendants say that if the court orders an account of profits, it will be the Defendants’ case that they ended up making no profits. Further, the Defendants say that if the court orders the assessment of equitable compensation or damages, the assessment will reveal that AMIL suffered no loss because, in short, the business opportunity was not profit making.

[4]The Globespan claims are brought against Mr Wilson and the Fourth Defendant, Ms Harriss. The claims are brought by AMIL and an associated company, the second Claimant, Commercial Aviation Services Limited (“CAS”). It is said that Mr Wilson took for his own benefit monies received by AMIL and CAS, which were the property of AMIL and CAS. It is said that Ms Harriss assisted Mr Wilson in these matters and is liable as an accessory.

[5]Ms Linden Ife appeared on behalf of the Claimants and Mr James Ramsden appeared on behalf of all the Defendants.

The various companies and individuals involved

[6]I will now refer to the principal companies and individuals who are involved in relation to the claims. For this purpose, I will identify all such persons whether they were involved in the main claims, or in the Globespan claims, or in both.

[7]Aviation Group International Limited (“AGI”) was incorporated on 9th January 2002. At all material times, the shareholders in AGI included Mr Kyme and Mr Malizia; Mr Kyme was executive chairman of AGI and Mr Malizia was chief operating officer and finance director.

[8]From around 2003, Commercial Aviation Services Limited (“CAS”) became a wholly owned subsidiary of AGI. CAS is the Second Claimant in these proceedings.

[9]Aerostar Maintenance International Limited (“AMIL”) was formed, in November 2002, to carry on the business of a joint venture between AGI and a Romanian company, Aerostar SA. AGI and Aerostar SA each owned 50% of the shares in AMIL. The joint venture was entered into in 2003. AMIL is the First Claimant in these proceedings.

[10]British Light Aircraft Company Limited (“BLAC”) was a wholly owned subsidiary of AGI.

[11]Aviation Maintenance International Limited was not part of the AGI group of companies. There was a link between AMIL and Aviation Maintenance International Limited through common office holders. Aviation Maintenance International Limited was controlled by Mr Kyme.

[12]The individuals associated with some of the above companies, and with AMIL in particular, were Mr Kyme as chairman of AMIL, Mr Malizia as finance director of AMIL, Mr Wilson (the First Defendant) as group managing director, Mr Cash as sales manager, Ms Harriss (the Fourth Defendant) as company secretary and financial controller and Mrs Lawrence, who replaced Ms Harriss as financial controller.

[13]Aerostar SA was a Romanian company based at Bacau in Romania. Mr Grigore Filip was the president of Aerostar SA.

[14]As will be seen, the negotiations and dealings which are the subject of the main claim concerned 11 aircraft known as MD82s. An MD82 is in the MD 80 series of aircraft and the aircraft were also referred to as MD80s.The aircraft were initially owned by a Chinese company, China Southern Airlines Company Limited. The Chinese company negotiated to sell the aircraft, together with certain spares, to joint purchasers who were a Singapore company, Phoenix Aircraft Leasing & Sales Pte, and a UK company with a similar name, Phoenix Aircraft Leasing & Sales Pte Limited. Mr Ashfield initially had a 30% stake in the UK company but later it became wholly owned by him. The UK company later changed its name to P. L. Aviation Limited (“PLA”).

[15]The purchaser from the Chinese company was intending to sub-sell the aircraft to an Iranian company, Galaxy Aviation Trade Company Limited (“Galaxy”). Galaxy’s representative was a Captain Seddigh. Galaxy received legal assistance in negotiating the relevant arrangements from a lawyer, Dr Adel. It may be the case that the onwards sale to Galaxy was to be by a company called Eurojet Aircraft Leasing 3 Limited; this company was controlled by Mr Ashfield. Mr Ashfield also controlled Aircraft Avionics Parts Support Limited (“AAPS”).

[16]It was Mr Ashfield (the Second Defendant) who was principally responsible for negotiating the sub-sale of the aircraft to Galaxy. The communications between Mr Ashfield and Galaxy took place directly, and also indirectly through three intermediaries, namely, Mr Amir, Mr Mohamed and Mr Kheradmand, whose e-mail addresses refer to Beta International and also to Beta UK.

[17]Romaero SA (“Romaero”) was a Romanian company based in Bucharest. Mr Vulcan was its managing director and Mr Popic was its commercial director.

[18]The First Defendant, Mr Wilson, began working for one or more of the companies in the AGI group of companies in around November 2003. In around March 2007, in a way which I will describe in detail later in this judgment, Mr Wilson became involved with a new company, originally known as Aviation Management International Ltd. It can be seen that the initials of this new company were A-M-I-L, which were the same as the initials of Aerostar Maintenance International Ltd which I have defined above as “AMIL”. In the course of describing the relevant events, I will refer to Aviation management International Ltd as “the new company” or “the new AMIL” as it appears that Aviation Management International Ltd was incorporated under that name so that its name would be deliberately similar to AMIL’s name. Later, Aviation Management International Ltd changed its name to Avman Ltd and I will also refer to this company from time to time as “Avman”. Avman is the Third Defendant.

[19]Globspan Airways Ltd (“Globespan”) was a customer of AMIL. It traded as FlyGlobespan. I understand that Globespan went into administration after the events involving it, which are the subject of the Globespan claims. I do not know the up to date position in relation to that administration. Mr Hughes was the technical director director of Globspan and Mr Newnham was its managing director.

The witnesses

[20]Most of the evidence related to the main claims rather than to the Globespan claims. It is convenient to refer to all the witnesses at this point, even to those whose evidence was principally or exclusively directed to the Globespan claims.

[21]The Claimants called Mr Malizia, Mr Cash and Mrs Lawrence. Mr Cash had only very limited evidence to give and this was not really challenged. Mrs Laawrence’s evidence related exclusively to the Globespan claims and was essentially based on the contents of documents and accounts which, in the end, were not in dispute. What was in dispute was what was going on beneath the surface of the accounting documents and Mrs Lawrence was not involved in those matters.

[22]I found Mr Malizia to be a reliable witness in relation to the main claims. Much of his evidence in relation to the main claims reflected what was, in any event, shown by the contemporaneous documents. However, he did give further evidence as to conversations he had with Mr Wilson and also as to conversations with Mr Filip of Aerostar SA after May 2007. In general, I accept his evidence on those matters. In particular, I prefer his evidence on those matters to the evidence given by Mr Wilson. In relation to the Globespan claims, Mr Malizia described some of the arrangements between AMIL and the directors of Globespan which appeared to me to be highly suspect. Mr Malizia appeared unconcerned about the probity of AMIL’s dealings in these respects. Further, I am not convinced that Mr Malizia was entirely candid about the depth of his knowledge of what Mr Wilson was doing in connection with the directors of Globespan. In considering whether I ought to accept his evidence in relation to the main claims, I have taken into account his activities in relation to the directors of Globespan. I also took into account the evidence he gave about the treatment of VAT within the AGI group. In the course of the trial, I was very concerned about the probity of Mr Malizia acting in the way that he did in relation to VAT. At the end of the trial, I reached the conclusion that it was unnecessary for me to come to any final view on that matter. That is because, even if Mr Malizia’s preparation of the invoices and his involvement in the VAT returns is open to serious criticism, I did not feel that this undermined his credibility when it came to his evidence on the matters directly relevant to the main claim. In conclusion in relation to Mr Malizia, I am inclined to accept his evidence in relation to the main claims but I will be more circumspect about accepting his evidence in relation to the Globespan claims.

[23]All three of the personal Defendants (Mr Wilson, Mr Ashfield and Ms Harriss) gave evidence. The Defendants called Mr Kyme of AGI/AMIL to give evidence pursuant to a witness summons. They also called a Mr Insley, a solicitor who had dealt with a part of the transaction which is relevant to the main claim. The Defendants also relied upon a witness statement from Captain Seddigh, which I admitted under the Civil Evidence Act 1995.

[24]I can accept some of the evidence given by Mr Wilson. Most of the time, he was prepared to be fairly candid as to what he had done. This may have been because the contemporaneous documents in the case showed fairly clearly what he had done. I have had more difficulty in accepting his evidence when it purported to be a description of his thought processes or when he recounted what had been discussed orally and where there was no surviving written record of that discussion. As regards his thought processes, he plainly wanted to put the best possible spin on why he acted as he did. In my judgment, if it is relevant to know why he acted as he did, it will be important for me to pay close attention to the underlying probabilities of the situation alongside his oral evidence. So far as there are conflicts between his evidence and that of Mr Malizia as to oral discussions between them, I prefer the evidence of Mr Malizia.

[25]Mr Ashfield prepared two witness statements. I will refer to them simply as “his witness statement” as it does not matter whether the written evidence he gave was contained in his first or in his second statement. I am very cautious about accepting the evidence of Mr Ashfield. His witness statement described a number of matters which readily appeared to be simply wrong and at variance from the contemporaneous documents. Further, Mr Ashfield’s witness statement suggested that various factors were in play, influencing the behaviour of those involved, when it seems clear that any such influence was felt only at a much later time than that described by him. That suggested to me that Mr Ashfield was significantly reconstructing the relevant events rather than attempting to describe his recollection of how they happened at the time. I certainly had no sense in the course of his evidence that he was making any real attempt genuinely to recall what actually happened and what he thought at the time. Further, Mr Ashfield frequently used the phrase “smoke and mirrors” when describing why he said many inaccurate things in the course of negotiations. I formed the impression both from the obvious inaccuracies in his witness statement, and his negotiating style in the course of the transaction itself, that Mr Ashfield was ready to say what suited his particular case at any point in time. That is not to say that I reject everything that he told me but it seemed to me that I must be cautious before accepting his uncorroborated evidence and particularly cautious before accepting his evidence in preference to the contrary evidence of another witness.

[26]Ms Harriss’ evidence was principally directed to the Globespan claims and I will consider it later in that context.

[27]Mr Kyme attended to give evidence pursuant to a witness summons. Mr Kyme did not prepare a witness statement but he was called by the Defendants to give oral evidence in chief and he was cross-examined. Mr Kyme frankly said that he did not remember dates nor all of the details relating to the matters on which he was asked questions. Mr Kyme’s evidence is material to what Mr Wilson said to him at a meeting in Winchester and I accept Mr Kyme’s evidence on that point.

[28]Mr Insley was a solicitor at SJ Berwin LLP. His firm entered into an undertaking as to certain sums provided by Galaxy to enable Avman to perform its part of the contract with Galaxy. His evidence was not contentious. PART II: THE MAIN CLAIMS The relevant events in detail

PART II: THE MAIN CLAIMS

[29]In September 2003, Mr Kyme of AGI and AMIL wrote to Mr Wilson offering him a job. Mr Kyme invited Mr Wilson “to join the team at AGI”. Mr Wilson’s job was to be group technical director. His employment was to from 1st November 2003. Mr Kyme’s letter was written on the notepaper of BLAC. It seems that Mr Wilson did not enter into a written contract of employment and there was initially some dispute as to the identity of Mr Wilson’s employer. By the end of the case, it was accepted that Mr Wilson was an employee of AMIL and acted as the managing director of AMIL. By the end of the case it was also agreed that Mr Wilson owed the fiduciary duties of a director to AMIL.

[30]Before Mr Wilson joined the AGI Group, and AMIL in particular, he previously had been a director and shareholder in Summit Aviation Company Ltd. He appears to have “left” Summit Aviation Company Ltd in July 2003 although he retained his shares in that company for a substantial period of time after that date. It was initially suggested that Mr Wilson’s continuing connection with Summit Aviation Company Ltd coupled with an alleged awareness on the part of the AGI group and/or AMIL of that connection somehow produced the result that Mr Wilson’s obligations as a director of AMIL and as an employee of AMIL were qualified or reduced. It seems to have been the case that others within the AGI group and/or AMIL were aware that Mr Wilson continued to have shares in Summit Aviation Company Ltd after the time that Mr Wilson joined the AGI group and/or AMIL. However, it is clear to me that there is nothing in Mr Wilson’s dealings with Summit Aviation Company Ltd, or in any awareness on the part of anyone at the AGI group or AMIL, which had the effect of reducing the ordinary obligations which Mr Wilson owed to AMIL as a director of, and as an employee of, AMIL.

[31]It is possible to describe the relevant events in the period up to the end of December 2006 relatively concisely. By August 2006, Mr Ashfield had become involved in the proposal to purchase 11 MD 82s from the Chinese company with a view to onward sale or lease of the aircraft to Galaxy. Mr Ashfield was involved to a significant extent in negotiating these arrangements and, in particular, was significantly involved with the negotiations with Galaxy.

[32]In around August 2006, Mr Ashfield decided to approach Mr Wilson to get him involved in a part of the arrangement. When Mr Ashfield approached Mr Wilson, Mr Ashfield approached him not in Mr Wilson’s personal capacity but as acting on behalf of the AGI Group and/or AMIL. After August 2006, it became clear that the capacity in which Mr Ashfield was discussing matters with Mr Wilson was Mr Wilson’s capacity as a director of AMIL. From August 2006, Mr Ashfield wanted to have AMIL involved to help Mr Ashfield negotiate matters with Galaxy. Mr Ashfield’s modus operandi with Mr Wilson often involved Mr Ashfield doing a first draft of a letter or an e-mail which Mr Wilson was then to send in the name of AMIL. So it was that on the 30th August 2006 Mr Wilson wrote on the headed note paper of AMIL to Mr Ashfield. Mr Wilson described himself as “group technical director”. Mr Wilson’s letter referred to the way in which AMIL could assist Mr Ashfield and his client, i.e. Galaxy, in that AMIL could carry out certain inspections, checks and maintenance of the 11 aircraft. I will not refer in any detail to this letter or similar letters like it as Mr Wilson and Mr Ashfield were at pains, in the course of their evidence, to say that much of the content of these letters was a sales pitch or, as they repeatedly said, “smoke and mirrors”. A less charitable description would be to say that some at least of the contents of these letters was simply not true.

[33]On 5th October 2006, Mr Wilson wrote to Galaxy. His letter was on the headed note paper of AGI and described him as a Director. Mr Wilson described the services which AGI could provide to Galaxy. The letter was on the basis that any physical work involved with the aircraft would be done by Aerostar or by a further company, Avioane Craiova SA.

[34]By 3rd November 2006, Galaxy was pressing Mr Ashfield for him to procure appropriate arrangements which would provide a comprehensive package to Galaxy in relation to the 11 aircraft. The comprehensive package was to include matters such as maintenance and repair of the aircraft but was also to include extensive training of pilots, engineers, other technical support staff and ground crew for the aircraft. Galaxy was insisting on having clear proposals in these respects before Galaxy would commit itself to buying or leasing the aircraft. Mr Ashfield passed this information on to Mr Wilson.

[35]By the end of September, the Chinese company and Phoenix Singapore had signed a letter of intent recording an understanding between them as to the sale of the 11 aircraft and 4 spare engines. The letter of intent provided for the aircraft to be flown to Bucharest. On 30th November 2006, Mr Ashfield told Mr Wilson that this letter of intent had been signed. At around this time, Galaxy signed a letter of intent to buy the 11 aircraft and 4 engines.

[36]By 17th December 2006, Mr Ashfield and Mr Wilson had worked on putting together a proposal to be made by AGI/AMIL to Galaxy. At this stage, the proposal was proceeding on the basis that the relevant work to the aircraft would be done by Romaero in Romania rather than by Aerostar or Avioane Craiova. In an email of 17th December 2006, from Mr Ashfield to Mr Wilson, Mr Ashfield expressed the view that it would be necessary to show a commitment to Galaxy by offering some kind of penalty payment for non performance and Mr Ashfield added: “I am prepared to do it in order to win this business”.

[37]On 18th December 2006, Mr Kheradmand sent an email to Mr Ashfield and Mr Wilson with a suggested draft letter to be sent by AGI/AMIL and to be passed on by Mr Ashfield to Galaxy. The draft letter was designed to describe the service which would be provided by AGI/AMIL and referred to work being carried out by Romaero in Bucharest. On the same day, Mr Wilson forwarded this email to Mr Malizia for his information and asked for his comments. So far as I can see, this is the first document in the bundle which shows Mr Malizia being involved in the suggested arrangements. Later that day, Mr Malizia replied to Mr Wilson with a suggestion as to the use of the Romaero logo on the letter. Mr Ashfield then appears to have drafted a letter on behalf of Romaero to be sent to AGI setting out the part which Romaero could play in the intended arrangements.

[38]Mr Malizia gave evidence that Mr Wilson had described the proposed deal with Romaero and Galaxy as involving “shed loads” of money for AMIL. It is clear to me that whilst the arrangments were being negotiated, Mr Wilson and Mr Malizia both believed that the arrangements would be very lucrative for AMIL.

[39]On 20th December 2006, AMIL wrote to Galaxy setting out the services which AMIL could provide to Galaxy. This letter was the result of the earlier drafting to which I have referred. The letter identifies AMIL, rather than AGI, as the relevant company to provide the services. The letter also identifies Romaero as the company which would do the relevant work in Romania.

[40]On 22nd December 2006, Romaero sent an email to Mr Wilson enclosing a draft of a contract to be entered into by Romaero for the relevant work to the aircraft.

[41]On 24th December 2006, Captain Seddigh emailed Mr Ashfield expressing a wish to have comparative quotations from suppliers other than Romaero. On 31st December 2006, Captain Seddigh sent a further email to Mr Ashfield expressing wider concerns about the difference in the terms of the sale by the Chinese company to Phoenix Singapore and the onward sale or lease to Galaxy. Captain Seddigh also stated that the AGI offer was not acceptable to him. Mr Ashfield replied on the same day commenting on those concerns about the AGI offer.

[42]By 7th January 2007, Mr Malizia of AMIL had become involved in drafting the documents which might be used to give effect to the intended arrangements. On 7th January 2007, he emailed a draft document to Mr Wilson and later that day he emailed a different draft to Romaero. The draft email to Mr Wilson was what was described as the third party working contract and the draft email to Romaero was what was described as the working contract. The working contract was intended to be an agreement between two parties, namely, AMIL and Romaero. Under the working contract, Romaero would take on obligations to carry out the requisite work and AMIL would pay Romaero for that work. Under the third party working contract, the three parties would be AMIL, Romaero and the ultimate customer who in this case was to be Galaxy. The third party working contract would specify the rights and obligations of the three parties and under that contract Galaxy would pay AMIL for the work being done by Romaero. The payment which Galaxy would make to AMIL would exceed the payment for the same work which AMIL would make to Romaero and the difference was the benefit to AMIL of being involved in these arrangements. The third party working contract which Mr Malizia sent to Mr Wilson on 7th January 2007 used the name Aerostar rather than Romaero; this draft was an intended template for a third party working contract to which Romaero would be a party.

[43]The documents do not show any other relevant matters in January 2007.

[44]The documents do not show a great deal of activity in February 2007. They do show that Mr Malizia was involved in drafting and amending the draft working contract and the third party working contract. On 19th February 2007, Mr Malizia emailed Mr Ashfield and attached the up to date version of a draft third party working contract. This email shows that Mr Malizia and Mr Ashfield were in direct contact at that stage.

[45]On 20th February 2007 there was a significant email from Mr Ashfield to Mr Malizia. Mr Ashfield referred to the issue of “commissions”. He stated that he and Mr Malizia had talked about this earlier when they were both in Amsterdam. Mr Ashfield then proposed that the return to AMIL from the proposed arrangements would be split between AMIL and Mr Ashfield or a company connected with him. He also stated that “we” would be providing components on a more or less exclusive basis. The reference to “we” seems to be a reference to Mr Ashfield or to a company connected with him.

[46]On the same day, 20th February 2007, Mr Malizia replied to Mr Ashfield. He said that he had “no problems” with Mr Ashfield’s proposals. Both of the emails on that day were copied to Mr Wilson.

[47]On 22nd February 2007, Mr Malizia sent an email to Romaero pressing for them to finalise the draft agreements. Mr Malizia stated that he and Mr Wilson would be in Bucharest on 19th February 2007 for 3 days.

[48]On 26th February 2007, an email from Mr Ashfield indicated that he would be in Romania from 28th February 2007 to 3rd March 2007 and would then be “out of the loop” until 15th March 2007.

[49]On 23rd February 2007, in the middle of an email chain dealing with drafting amendments to the agreements involving AMIL and Romaero, Mr Popic of Romaero sent an email to Mr Malizia which complained that a sum of $60,640 was outstanding as due to Romaero. Mr Popic stated that Romaero had previously written to Mr Malizia and to Mr Kyme but no answer had been received. On the same day, Mr Malizia replied to Romaero with a copy being sent to Mr Kyme. The point made by Mr Malizia was that the sum in question was owed by Aviation Maintenance International Limited, which was not part of the AGI group, and a claim for payment should be directed to Aviation Maintenance International Limited. Mr Malizia asked Romaero to deal with the outstanding points on the draft agreements. There is no subsequent reference in the documents to the claim to $60,640.

[50]On 5th March 2007, Romaero emailed Mr Malizia with comments on the two draft agreements to which AMIL and Romaero were intended to be parties and on the same day, Mr Malizia replied dealing with the points arising.

[51]On 5th March 2007, Mr Amir of Beta International, emailed Mr Wilson with a copy to Mr Ashfield. Mr Amir referred to the “delegation’s” visit to Romaero. This was a reference to representatives of Galaxy inspecting the Romaero works. Mr Amir recorded that Galaxy’s impressions were favourable. However, Galaxy had requested Romaero and AMIL to review the rate of 50 euros per man hour which AMIL intended to charge Galaxy. This email to Mr Wilson, which was copied to Mr Ashfield, produced some further emails between Mr Wilson and Mr Ashfield which are of importance in this case.

[52]On 5th March 2007, Mr Ashfield emailed Mr Wilson in these terms:

“Welcome to the real world of the “boys” do we really want AGI in this (your decision Rgds Jeff)”

[53]Mr Wilson promptly replied to Mr Ashfield’s email as follows:

“God knows Jeff, [In] all honesty I have never done the dirty in my life but this may be just too rich to keep taking the “correct” line. I think that we should build in a firewall that enables you to pull the plug at any time and go around AMIL/AGI if you so chose. I think that there is a deal that could be done at Romaero with Misa and Dan but it would burn the bridges for sure! I look forwards to any guidance that you can give.”

The reference to Misa is a reference to Mr Popic of Romaero and the reference to Dan is reference to Mr Vulcan of Romaero.

[54]Mr Ashfield’s reply to Mr Wilson on 5th March 2007 was in these terms:

“Fully understood and at this stage I will just spell it out in words of 1 syllable regarding how it will work but once we are up and running the two B’s (funny how it is that) could really create problems and I think Barry’s priorities for monies could become an issue where only you and I carry the can do all the work and they spend it. They had effectively done “the dirty” on your Aerostar arrangements by not paying and probably that is why they courted BAE speak tomorrow RGDS Jeff”

The reference to the “2 B’s” was a reference to Mr Malizia and Mr Kyme.

[55]The final email in this exchange came on 5th March 2007 from Mr Wilson to Mr Ashfield in these terms: “For sure this is what has happened, co-incidentally with this happening Builder-Man has managed to get all his cash back but my bikes are still in hock! Plu[s] ca change! The reference to Builder-Man was a reference to a Mr Reeves who had lent money to Mr Malizia which Mr Malizia had loaned to AMIL. The rates of interest being charged by Mr Reeves to Mr Malizia, which were passed onto AMIL, were high rates which reflected the fact that AMIL had not found it possible to obtain finance at a more conventional rate of interest. The reference to Mr Wilson’s bikes being in hock was that Mr Wilson had borrowed money from a Mr David Thompson in order to introduce capital into the AGI group. As security for repayment of this loan, Mr Wilson had charged his collection of motor bikes and a Ferrari car to Mr Thompson.

[56]Mr Wilson was cross-examined about the email messages between himself and Mr Ashfield on and after 5th March 2007. He said that he did not think that what was suggested in them involved anything wrong or illegal.

[57]Mr Ashfield also was cross-examined about the exchange of emails between himself and Mr Wilson on 5th March 2007. Mr Ashfield said that what he suggested was not dishonest. He was asked about Mr Wilson’s phrase referring to “not doing the dirty”. Mr Ashfield said that AGI/AMIL had done the dirty on Mr Wilson and Mr Wilson was entitled to retaliate on the basis of “an eye for an eye”. He said that he did not think that what he was suggesting involved breaking the law. Much later in his cross-examination on this topic, he said that Mr Wilson would only be doing the dirty in moral terms rather than in the sense of breaking a legal obligation.

[58]On 6th and 7th March 2007, Mr Wilson set about drafting a letter to be sent by AMIL to Captain Seddigh of Galaxy, offering Galaxy revised prices for some of the work to be carried out. Mr Wilson had consulted Mr Malizia and Mr Kyme on a draft of his letter. The letter was sent on 7th March 2007 setting out detailed prices for different parts of the relevant work.

[59]On 8th March 2007 Mr Wilson received an email from Chris Souden who then worked for European Aviation. Mr Souden replied to a request from Mr Wilson for information as to the cost of certain modifications which would be needed to be carried out to the aircraft if they were to be listed on the European register of aircraft. Mr Wilson passed Mr Souden’s email on to Mr Ashfield and referred in favourable terms to Mr Souden and “Steve” who was a Mr Steve Rawlings. Mr Wilson then told Mr Ashfield of a price he had quoted and said “the divv-up is down to you!”

[60]On the same day, 8th March 2007, Mr Ashfield replied to Mr Wilson’s email saying:

“50/50 after a bit for the boys who may even add their own on! But with you not AGI”

[61]When Mr Wilson was cross-examined about this series of communications, he acknowledged that he might have discussed with Mr Souden the possibility of a new business formed by Mr Wilson offering Mr Souden a job and that such an offer might have been made before 8th March 2007. As will be seen, Mr Souden and Mr Rawlings were in due course employed by, or were engaged under a contract with, the new company which was formed as the new AMIL, later called Avman.

[62]On 8th March 2007, Mr Wilson called a meeting of the board of AGI and, pursuant to this request, Mr Malizia and Mr Kyme met Mr Wilson at Gatwick on 9th March 2007. Mr Malizia said that Mr Wilson expressed concerns about the financial position of AGI and stated that he was considering resigning from the group. Mr Malizia had borrowed money from a Mr Reeves which Mr Malizia had then introduced into the AGI group. The group made substantial payments of interest to Mr Malizia for him to pay on to Mr Reeves. Mr Malizia agreed to discuss with Mr Reeves the amount of the debt and the terms as to interest and repayment. Mr Malizia said that he subsequently did meet Mr Reeves and achieved a favourable renegotiation of those terms.

[63]Mr Kyme also gave evidence about this meeting on 9th March 2007 at Gatwick. Mr Kyme said that at this meeting, Mr Wilson expressed his unhappiness with the amount of money leaving AGI in favour of Mr Reeves. Mr Wilson said that he intended to resign. He said that he would reconsider his resignation if Mr Malizia were able to negotiate with Mr Reeves for smaller payments to be made to Mr Reeves.

[64]Mr Wilson was asked about this meeting at Gatwick. He did not accept the suggestion put in cross-examination that he was trying to set up a situation where he could resign and then take the proposed contracts for himself.

[65]On 9th March 2007, Mr Wilson passed onto Mr Malizia the up to date version of the amended agreements.

[66]On 11th March 2007, Mr Malizia sent an email to Mr Wilson referring to the terms of the draft agreements. Mr Malizia and Mr Wilson had met the previous day and discussed amendments and Mr Malizia was confirming that he had made the amendments to the draft documents. Mr Malizia said in his email that the main issue that Mr Wilson should speak to Mr Ashfield about was the question of penalty payments in the event of late delivery. Mr Wilson forwarded this email to Mr Ashfield.

[67]On 12th March 2007, Mr Amir emailed Mr Wilson, copied to Mr Ashfield. Mr Amir suggested that Mr Wilson should put together a package of documents defining the shareholders and directors of AMIL together with references as to work it had previously done and other matters. Mr Amir explained that his experience was that documents of that kind might be required by Galaxy at the last moment just before signing the agreements.

[68]On 12th March 2007 AMIL wrote to Captain Seddigh of Galaxy. AMIL’s letter was signed by Mr Wilson as Managing Director. Mr Wilson stated in the letter that following long and difficult discussions with his fellow directors he had succeeded in persuading his board to reduce the man hour rates for the relevant work.

[69]On 17th March 2007, Mr Wilson sent an email to Mr Popic of Romaero. Having dealt with other matters, Mr Wilson said that he would like to speak to Mr Popic “in confidence” and that Mr Popic should try to contact Mr Wilson on Mr Wilson’s mobile. Mr Wilson was cross-examined about his suggestion of a confidential discussion with Mr Popic. Mr Wilson accepted that he may have mentioned to Mr Popic the possibility of a new company cutting AMIL out of the deal. Whether that was said to Mr Popic or not, Mr Wilson’s answer suggests that he was actively pursuing the idea of cutting AMIL out of the proposed contracts as early as 17th March 2007.

[70]Mr Malizia was pressing Mr Popic at this time for Mr Popic’s response to the draft agreements which had been sent to Romaero. Mr Malizia sent emails to Mr Popic for this purpose on 19th, 20th and 22nd March 2007. Mr Popic’s response on 22nd March 2007 was to the effect that Romaero was waiting for legal advice which would not be available before 26th March 2007.

[71]On 18th March 2007, Dr Adel, the legal advisor to Galaxy, made his suggested amendments to the third party working contract. Dr Adel’s annotations to clause 8 of this contract referred to the question of penalties for delayed delivery. It is difficult to read the precise comment because of a cut off in photocopying. Dr Adel’s comments were sent to Mr Ashfield who sent them on to Mr Wilson. Mr Ashfield replied to Dr Adel stating that the majority of Dr Adel’s comments could be agreed but that certain areas would require further negotiation or compromise. One of these areas was the question of penalty payments for delayed delivery. Mr Ashfield told Dr Adel that he felt sure that some middle ground could be achieved. Mr Ashfield then emailed Mr Wilson suggesting how the matter should be dealt with in the revised draft agreement.

[72]I will now break off the narrative as to the negotiations between AMIL, Galaxy and Romaero to describe what the documents show as to the formation of Aviation Management International Limited and the obtaining of bank accounts and email addresses for that company. Aviation Management International Limited is the Third Defendant in these proceedings. It later changed its name to Avman Limited. When originally set up, its name had the same initials as AMIL and I will refer to it from time to time as “the new AMIL”.

[73]Mr Ashfield had a colleague, John Meadows. On or before the 22nd March 2007, Mr Meadows contacted a company formation agent to set up a new company by the name of Aviation Management International Limited. The company formation agent emailed Mr Meadows on 22nd March 2007 confirming that it was acting on his instruction. Later that day, the company formation agent raised a difficulty about the use of the word “International” in the company’s name. That matter was dealt with on the 22nd and 23rd March 2007 as a result of Mr Meadows completing a certain application form justifying the use of the word “International”. On 26th March 2007, the company formation agent emailed Mr Meadows stating that the application for incorporation had been sent to Companies House that day. The agent referred to Mr Wilson as the only original subscriber to the memorandum. The agent also stated that the company would have a director, Mr Wilson, and Mr Meadows was to be the secretary. The registered office was to be at premises connected with Mr Wilson. The new AMIL was duly formed on 26th March 2007. The formation agent sent an email to Mr Meadows to inform him of that fact and Mr Meadows forwarded the email to Mr Ashfield on 26th March 2007. As intended, Mr Wilson was the only subscriber and the first director and the registered office was the address to which I have referred. The documents issued by Companies House showed Mr Wilson to be a director of AMIL, AGI and BLAC and certain other companies.

[74]Shortly after the formation of the new AMIL, steps were taken to open bank accounts in its name. On or before 29th March 2007, Mr Ashfield had contacted the Pall Mall branch of HSBC and on the 29th March 2007 that bank sent Mr Ashfield by email a draft mandate for a company account. On 30th March 2007 the bank emailed Mr Ashfield, referring to a telephone conversation that day. The bank had opened a Sterling account for the new AMIL. The bank asked Mr Ashfield to arrange for “Chris” to sign certain documents. It is clear that Mr Ashfield had by 30th March 2007 told the bank that Mr Wilson was involved with the new AMIL. On 30th March 2007, Mr Ashfield sent an email to Mr Wilson and to Mr Meadows concerning the bank account. Mr Ashfield told Mr Wilson that “we are all systems go!!!”. Mr Ashfield asked Mr Meadows to forward the necessary document to Mr Wilson for Mr Wilson to sign. On 2nd April 2007, the bank emailed Mr Ashfield to give him details of two further accounts which had been opened, namely, a Euro account and a US Dollar account. On the same day, Mr Ashfield emailed Mr Wilson with information about the bank and pointed out that the bank had “a nice branch address”.

[75]On 29th March 2007, Mr Malizia received a fax from HSBC which referred to the opening of a bank account in the name of “Aviation Management International Limited”. Mr Malizia did not understand what this referred to and he requested an urgent meeting with Mr Wilson. Mr Malizia then met Mr Wilson at Gatwick. At that meeting, Mr Wilson explained to Mr Malizia that the new company was formed to act as an intermediary between Galaxy and AMIL to protect the funds that would be flowing to AMIL. The new company would hold funds in an escrow account. Mr Malizia specifically asked Mr Wilson whether the proposed contract or contracts would still be in the name of AMIL and Mr Wilson confirmed that they would be. Mr Malizia accepted what Mr Wilson told him at that meeting. Mr Malizia repeated this evidence in cross-examination. Mr Wilson’s account of this conversation was somewhat different. I accept the evidence given by Mr Malizia.

[76]By 1st April 2007, Mr Ashfield had arranged for new email addresses to be created in connection with the new AMIL. The person responsible for creating the new email addresses referred to addresses created for Mr Ashfield, Mr Wilson, Ms Harris (who was also known as Ms Jenkins) and Mr Souden. On 2nd April 2007, Mr Ashfield forwarded this information to Mr Wilson telling him that all he needed to do was to set up his computer accordingly.

[77]Having described the incorporation of the new AMIL, the opening of bank accounts for that company and the creation of email addresses for the staff of that company, I can return to the narrative as to the negotiations with Galaxy and Romaero.

[78]Mr Wilson on behalf of AMIL was due to fly to Romania on 27th March 2007 for the purpose of a meeting with representatives of Romaero and of Galaxy. In preparation for that meeting, Mr Wilson wrote to Captain Seddigh of Galaxy referring to a meeting which would involve Romaero, AMIL, Galaxy and also Phoenix; the reference to Phoenix must have been a reference to Mr Ashfield. Mr Wilson wrote on the headed note paper of AMIL and signed himself as managing director. On 24th March 2007, the suggestion was made to Mr Wilson by Mr Ashfield and by Mr Amir that Mr Wilson should bring to the meeting in Romania a certified copy of the memorandum and articles of association of AMIL together with a certified copy of the certificate of incorporation. It was also suggested that Mr Wilson should have a Power of Attorney authorising him to sign the necessary agreements.

[79]Mr Wilson obviously contacted Mr Malizia in relation to these formal documents from AMIL. On 26th March 2007, Mr Malizia confirmed that he had obtained the relevant documents together with a Power of Attorney in favour of Mr Wilson. Mr Malizia also emailed to Mr Wilson a copy of the third party working contract showing the draft terms as at that date. The third party working contract as drafted continued to be between three parties, AMIL, Romaero and Galaxy. The draft did not contain a penalty clause in the event of late performance by AMIL or Romaero.

[80]On 26th March 2007, AMIL executed a general Power of Attorney in favour of Mr Wilson. The power was executed by Mr Malizia and by Mr Kyme. It seems that the company documents relating to AMIL and the Power of Attorney were indeed provided to Mr Wilson for him to take with him to Romania.

[81]A meeting in Romania duly took place at the end of March 2007. Mr Wilson attended that meeting on behalf of AMIL. On 30th March 2007, after the meeting, Mr Ashfield sent an email to Mr Wilson and Captain Seddigh and others. Mr Ashfield said that good progress had been made at the meeting. The key issues of man hour rate and handling charges had been resolved. Mr. Ashfield said that the proposed penalty provision had been accepted but not put into words.

[82]On or before 30th March 2007, a draft of what had been called the third party working contract was prepared. This draft differed from earlier drafts in a number of respects. The first significant respect was that in place of AMIL, there had been substituted the new AMIL who was described in the heading to the agreement as “Aviation Management International Limited (AMIL)”. Thus, in this draft agreement, the new company’s name was introduced but it was still referred to by the initials “AMIL”. The contact name for the new AMIL was Mr Wilson and his email address was given as the email address connected with the new company.

[83]A further amendment to the third party working contract was the introduction of a fourth party, namely, PLA. Although the draft contract now had four intended parties, it continued to be known as the third party working contract. The earlier draft of this contract was amended in a large number of places to refer to the position of PLA and PLA took on a number of obligations to the other parties. Galaxy and Romaero continued to be parties to the draft agreement. Clause 8.7 of the draft agreement provided for a payment to be made by the new AMIL in the event of the aircraft not being redelivered to Galaxy by specified dates. The amount of the payment was left blank in the draft. In a part of the draft agreement dealing with the handling of invoices, reference was made to information being given to Ms Jenkins which was the name then being used by Ms Harris. Her email address was the email address in relation to the new company.

[84]On 2nd April 2007, Captain Seddigh of Galaxy emailed to Mr Wilson and Mr Ashfield the most recently revised version of the third party working contract. This version was essentially the same as the version of 30th March 2007 which I have already described. In particular, the contract was to be made with the new company and not with AMIL. As far as one can see, the email from Captain Seddigh to Mr Wilson was to Mr Wilson’s email address at AGI or AMIL and not at the new company.

[85]Attention was then given to drafting and agreeing a suitable clause dealing with delay and a penalty payment in the event of delay. The email communications with Mr Wilson used his AGI or AMIL email address. For example, on 2nd April 2007, Mr Wilson sent an email to Captain Seddigh enclosing a draft clause and the email was signed by him as a director in the AGI Group of companies.

[86]Around this time, attention was given to a possible arrangement under which monies would be advanced by Galaxy to be spent by the relevant contracting party under the third party working agreement. To protect Galaxy in relation to these monies, it had been suggested that the money would be held in an escrow account operated by SJ Berwin LLP, who were solicitors known to Mr Ashfield.

[87]Mr Kyme met Mr Wilson and Ms Harriss at a hotel in Winchester. It was put to Mr Kyme that this meeting took place in early April 2007. Mr Kyme seemed to agree with that suggestion and, in particular, that this meeting was before a later meeting of the board of AMIL on 17th April 2007. Mr Kyme said that at the Winchester meeting, Mr Wilson told him that he was minded to leave AGI. Mr Wilson referred to “taking the contract with him”. Mr Kyme did not think that he could do anything to stop Mr Wilson doing that. There was a discussion about Mr Kyme joining Mr Wilson’s new business but Mr Kyme soon realised that there would not be a place for him in that new business. Mr Kyme did not tell Mr Malizia about this meeting.

[88]Mr Wilson referred to his meeting with Mr Kyme at the hotel in Winchester. He said that he told Mr Kyme that he was going to take over the proposed contracts for himself. He said that Mr Kyme thought that was a good idea and suggested joining Mr Wilson.

[89]Mr Wilson also said that he told Mr Filip the same thing and Mr Filip raised no objection and offered Mr Wilson a job with Aerostar SA. Mr Wilson also said that he told Romaero around this time that he was planning to leave AMIL and that he was taking the benefit of the proposed contracts for himself.

[90]Mr Kyme said in his evidence that he thought that, at some point, Mr Wilson had spoken to Mr Filip about his intention to leave. Mr Kyme did not get this information from Mr Filip but only from Mr Wilson and Mr Kyme was very unclear about what was supposed to have been discussed between Mr Wilson and Mr Filip.

[91]Mr Ashfield said that he was told by Mr Wilson that Mr Wilson had told Mr Kyme and Mr Filip of what he intended to do.

[92]Mr Malizia was asked in cross-examination whether he was aware of the possibility that Mr Wilson had told Mr Filip of Aerostar SA that Mr Wilson intended to leave AMIL and take the proposed contracts with him. Mr Malizia said that, in July 2007, Mr Filip told Mr Malizia that he was surprised when he learnt that Mr Wilson had entered into the contracts through a new company controlled by him. Mr Malizia said that when he became aware of Mr Wilson’s intended evidence on this point, he asked Mr Filip about it. Mr Filip denied that he had been told this by Mr Wilson. I was also told that Mr Filip supported and indeed funded the present proceedings.

[93]In due course, the new AMIL, Romaero, Galaxy and Phoenix entered into the working contract and the third party working contract. The two party working contract appears to have been signed by Romaero on 16th April 2007 and the same was signed by Mr Wilson describing himself as the managing director of the new AMIL also on 16th April 2007. The third party working contract was signed by the new AMIL on 3rd April 2007, by Galaxy also on 3rd April 2007 and by PLA and Romaero on 12th April 2007.

[94]The parties also negotiated a guarantee to be given personally by Mr Wilson in favour of Galaxy in relation to money which would be provided by Galaxy to the new AMIL in advance of services being provided to Galaxy.

[95]On 13th April 2007, Mr Ashfield sent to Romaero company documents relating to the new AMIL. These included its memorandum and articles of association. In his covering email, Mr Ashfield said:

“Please find herewith the other requested company documents for the AMIL formed specifically for this transaction at my insistence to keep all funds separate”

. By this email, Mr Ashfield was giving an explanation as to why the new AMIL had been formed. I interpret this explanation as being consistent with the original AMIL remaining in the transaction but with the interposition of the new AMIL for the purpose of keeping funds separate.

[96]On 14th April 2007, Captain Seddigh sent an email to Mr Wilson apparently at his AGI or AMIL address.

[97]On 16th April 2007, Mr Wilson sent an email to Mr Ashfield from the new email address connected with the new company. The attachment to Mr Wilson’s email was a progress report in relation to the works to be carried out under the contracts. The report is dated 14th April 2007 and is drafted on the basis that Galaxy and the new AMIL had already entered into the relevant agreement. Mr Wilson stated that the third party working agreement had been signed by Romaero.

[98]On 17th April 2007, there was a board meeting of AMIL. This board meeting was attended by Mr Kyme, Mr Malizia and Mr Wilson as the AGI directors of AMIL. The meeting was also attended by Mr Filip and three others as the Aerostar directors of AMIL. Ms Harriss attended as the company secretary of AMIL. The hand written minutes of this meeting show that the board attended in considerable detail to the up-to-date affairs of AMIL. Mr Wilson fully participated in the discussions and in particular the discussion about future matters that might be attended to. The board discussed the position in relation to the 11 MD 82s to be worked on by Romaero. By this date (17th April 2007) the new AMIL had already entered into the working contract with Romaero and the third party working contract with Romaero and Galaxy. However, the way in which the matter was presented to the board was that the arrangements were still in negotiation albeit at an advanced state of negotiation. The discussion appeared to assume that AMIL would be able to win this business if the negotiations came to fruition. Mr Wilson did not tell the board that the new AMIL had been formed or that the new AMIL had already entered into contracts with Romaero and Galaxy. Mr Kyme did not say anything to contradict the way that the matter was discussed. Nor did anyone else.

[99]At this point I can make my finding as to whether Mr Wilson told Mr Filip at some point that he was going to leave AMIL and take the benefit of the contracts (or proposed contracts) with Romaero and Galaxy with him. In my judgment, it is inherently unlikely that Mr Filip would have consented to Mr Wilson taking the benefit of those contracts from AMIL. Those contracts were understood to be potentially very lucrative. It is therefore inherently unlikely that Mr Filip would have been content to give them up to Mr Wilson. It is also difficult to understand why Mr Filip would have conducted himself the way he did at the board meeting on 17th April 2007, if he had known what Mr Wilson now alleges that he told him. I accept the evidence from Mr Kyme that he was told of Mr Wilson’s intentions and it is clear that Mr Kyme did not bring up that subject at the board meeting. But Mr Kyme may have been in a special position which makes his actions more understandable. He was not very active in AGI/AMIL at his point. He appears to have been very lax about the affairs of AGI/AMIL and left the detail of its affairs to others. He seems to have been very detached from the negotiations in relation to these contracts. He said in his evidence that he was not really involved in that matter. He also seems to have been more interested in following Mr Wilson than in protecting the interests of AMIL.

[100]It may well be that Mr Wilson said something to Mr Filip about his intention to resign from AGI if he did not have any reassurance about the company borrowings. It is possible that Mr Filip sympathised with Mr Wilson’s position and recognised that if Mr Wilson decided to leave AGI/AMIL there was nothing that Mr Filip could do about it. But that is a long way from Mr Filip being told that Mr Wilson would take from AMIL, for his own benefit, the proposed contracts which were being negotiated.

[101]In the end, the inherent probabilities and the fact that I cannot rely sufficiently upon Mr Wilson’s own evidence on this subject, lead me to the conclusion that Mr Wilson did not tell Mr Filip that he was proposing to take the benefit of the contracts for himself.

[102]I also need to consider what Mr Wilson told Mr Ashfield about the information which had been given to Mr Filip. In view of my finding as to what that information was (and that it stopped short of telling Mr Filip of what Mr Wilson and Mr Ashfield were really planning to do), I do not think that Mr Wilson would have said to Mr Ashfield anything more than he had told Mr Filip of his concerns and of his possible resignation.

[103]Although both Mr Wilson and Mr Ashfield say that Mr Filip was told of the intention to take the benefit of the contracts from AMIL, I think that it is likely that they have both overstated this aspect of the matter so as to present their conduct in a less unattractive light.

[104]On 23rd April 2007, Russell Morland who was an employee of AMIL sent an email to Mr Wilson and Mr Cash stating that he wished to leave AMIL at the end of May 2007 to pursue other interests/responsibilities in Russia. When Mr Ashfield obtained, at the beginning of April 2007, new email addresses for certain persons to be connected with the new AMIL, one such email address was obtained for Mr Morland.

[105]By 26th April 2007, SJ Berwin LLP had drafted a personnel guarantee to be given by Mr Ashfield to Galaxy in relation to advances to be made by Galaxy to the new AMIL for services to be provided to Galaxy.

[106]The documents as finally executed were as follows. The third party working contract was signed by the new AMIL on 3rd April 2007. Galaxy also signed on 3rd April 2007. PLA and Romaero signed on the 12th April 2007. The working contract was signed by the new AMIL and Romaero on the 16th April 2007. SJ Berwin LLP entered into the stakeholders’ letter which had been requested by Galaxy, on 17th April 2007. This letter was countersigned by PLA on 17th April 2007. Galaxy countersigned it on 17th April 2007 and Mr Wilson of the new AMIL countersigned it on 19th April 2007. On 27th April 2007, Mr Ashfield gave his personal guarantee to Galaxy in relation to the funds to be provided in advance by Galaxy to the new AMIL. It does not seem that Mr Wilson was required to give his personal guarantee in that respect although there had existed an earlier draft document in those terms.

[107]Clause 8.7 of the third party working contract as executed contained a penalty clause under which the new AMIL could be liable to pay a sum of 3,500 euros per day of delay.

[108]On 1st May 2007, Mr Wilson called a board meeting of AGI. The board comprised Mr Wilson, Mr Malizia and Mr Kyme. Before the meeting, Mr Malizia asked Mr Wilson about the up to date position with the proposed contracts and Mr Wilson told Mr Malizia that he was still negotiating them. When the board met on 1st May 2007, Mr Wilson announced that he was resigning from the AGI group. He gave as his reason for his resignation the level of debt owed by the AGI group. Mr Wilson told Mr Malizia that AMIL had lost the contracts with Romaero and Galaxy. He did not say who, if anyone, had won the contracts. Mr Malizia repeated this evidence in cross-examination and I accept it.

[109]It is accepted that Mr Wilson ceased to be a director of AMIL on 1st May 2007, having resigned with immediate effect.

[110]On 9th May 2007, Mr Kyme resigned as a director of AGI, AMIL and CAS.

[111]On 16th May 2007, Ms Harriss was appointed company secretary of the new AMIL, in place of Mr Meadows.

[112]On 23rd May 2007, Ms Harriss resigned as company secretary of the various companies in the AGI Group, including AMIL.

[113]On 12th September 2007, Aviation Management International Limited, the new AMIL, changed its name to Avman Limited.

[114]At some point, Mr Wilson and Mr Ashfield came to an agreement whereby certain sums which would be payable to Avman by Galaxy would be split so that Avman would retain only a part of those sums. The remainder would be divided between Mr Ashfield (or one of his companies) and an entity referred to as Beta Co, who were described as Jeff’s associates in Iran. The total sum which it was computed was available to split in this way was $33. Of this, Avman would retain $9, Mr Ashfield (or one of his companies) would receive $7.50 and Beta Co would receive $16.50. An arrangement of this kind is referred to in a document which was produced on disclosure. The document is described as a note to record an agreement. The document was to be signed by Mr Wilson, Mr Ashfield, Mr Meadows and a person acting for Beta Co. The document as disclosed is signed by Mr Ashfield and Mr Meadows. Mr Wilson accepted in his evidence that an arrangement of this kind had been reached. It is not possible to say when this arrangement was reached. The document disclosed as the words “dated as of 1 March 2007” but it is not contended that the agreement was actually made as early as that date. The document also records that Beta Co was to contribute to the salaries paid by Avman to Mr Souden and Mr Rawlings. Further, it is noted that AAPS, a company connected with Mr Ashfield, was to contribute to the salaries of Ms Harriss and Mr Morland.

[115]It is convenient at this point to describe what the documents show as to the sales of the 11 aircraft to Galaxy. On 28th September 2006, Euro Jet Aircraft Leasing 3 Limited and Galaxy signed a letter of intent in relation to the sale of the 11 aircraft to Galaxy for $42.5 million. The letter of intent provided that Galaxy was obliged to pay an initial deposit of $90,000 per aircraft, a total of $990,000. On 1st December 2006, Phoenix Aircraft Leasing and Sales Pte Limited, as nominee for Euro Jet Leasing 3 Co Ltd, entered into a sale and purchase agreement with Galaxy for the 11 aircraft and 4 spare engines. The total price was agreed to be $39.45 million. The agreement recorded that a deposit of $990,000 had been paid by Galaxy. Major difficulties arose when Galaxy became aware that the price it had contracted to pay for the 11 aircraft and 4 engines was significantly higher than the price being paid to the Chinese company for their purchase. Galaxy asserted that its seller had represented to it that the mark up on the price charged by the Chinese company for the onward sale to Galaxy would have been of much more modest proportions. This led to a renegotiation of the price for the sale to Galaxy. On 31st January 2007, there was a supplementary agreement entered into by Phoenix Aircraft Leasing and Sales Pte Limited, the Singapore Company, together with Phoenix Aircraft Leasing and Sales Pte Limited, the UK Company, and Galaxy. The contract price was revised downwards to $22.5 million. The supplementary contract provided for delivery of the aircraft by stages with separate prices and separate part payments recorded in the agreement.

[116]Mr Ashfield described the somewhat complicated arrangements which had been made in relation to the sale and purchase of, and the title to, the 11 aircraft. In brief summary, the position appears to have been as follows. China Southern was paid the price in the main sale agreement for the 11 aircraft. In turn, Galaxy paid the price agreed in the sub-sale agreement. As between the two companies who constituted the sub seller, Phoenix Singapore and Phoenix UK (now called PLA) the profit on the sub-sale was kept by Phoenix Singapore. The aircraft were registered in the name of PLA with the UK Civil Aviation Authority. There is a put and call option agreement between PLA and Captain Seddigh (rather than Galaxy). There is a debt, described by Mr Ashfield as a notional debt, owed by PLA to Captain Seddigh or to Galaxy. In the event of the put or call option being exercised and title being transferred to Captain Seddigh, the notional debt is cancelled. I was also given further detailed evidence as to the whereabouts of the 11 aircraft and the identity of the operators of them and terms on which the operators are able to use the aircraft but it is not necessary to record that detail.

Further evidence and further findings of fact

[117]Having set out the history of the relevant events based principally on the contemporaneous documents, I will now refer to miscellaneous passages in the evidence which are relevant to the issues which I have to decide. Having referred to that evidence, I will then make my findings on those disputed matters of fact.

[118]Mr Malizia dealt in detail in his witness statement with the suggestion put forward by the Defendants that Romaero was not prepared to contract with AMIL because of the debt (of some $60,000) owed by Aviation Maintenance International Limited to Romaero.

[119]Apart from the one reference to this debt in an email from Romaero to Mr Malizia, Mr Malizia stated that Romaero had not referred to this debt and had never said that Romaero would decline to contract with AMIL unless and until this debt was paid. There were many occasions when Romaero could have communicated that this was their position (if it ever had been) but it never said anything to that effect. The continuation of the negotiations between Romaero and AMIL was inconsistent with Romaero having any such attitude. Mr Malizia also said that Mr Wilson never reported to him that this was Romaero’s position. Mr Malizia gave the same evidence when he was cross-examined on that subject. In re-examination, he stated that if Romaero had pressed the matter so that it became clear that AMIL would not be able to do the deal with Romaero without paying this debt to Romaero, then AMIL would have accepted that it would probably have to pay the debt. Mr Malizia would then have agreed with Mr Kyme that the responsibility for the debt ultimately rested with Mr Kyme.

[120]Mr Malizia was asked in cross-examination whether AMIL would have been prepared to agree a contract with Galaxy which provided for the possibility of a penalty payment to Galaxy in the event of delay in completion of the work required by the contract. Mr Malizia said that AMIL would be prepared in principle to agree to a penalty clause in such an event and he would have relied upon Mr Wilson’s technical advice on that subject.

[121]Mr Malizia was cross-examined on the basis that AMIL would not have been able to take on the proposed contracts because it would have needed substantial working capital in order to be able to do so and, it was put to Mr Malizia, AMIL did not have adequate working capital. Mr Malizia replied by pointing to the detailed provisions in the contracts being drafted to be entered into by AMIL which provided for substantial up-front payments to be made by Galaxy and which, he explained, would enable AMIL to perform its obligations under the contracts without introducing further capital of its own.

[122]Mr Malizia was also cross-examined about the ability of AMIL or someone connected with AMIL to give or to procure a guarantee to Galaxy similar to the guarantee provided by Mr Ashfield. Mr Malizia stated that AMIL had never been asked to give such a guarantee. He also pointed out his understanding that the guarantee given by Mr Ashfield had been given some weeks after the main contracts had been entered into. Mr Malizia added that if such a guarantee had been required by Galaxy, then AMIL would have been able to obtain an appropriate bank guarantee where the bank would be prepared to give such a guarantee on the strength of commitments undertaken by Mr Reeves to that bank.

[123]Mr Wilson accepted, when cross-examined, that he was a director of AMIL until 1st May 2007. He also accepted he was an employee of AMIL until the same date. He suggested that he had carried on business activities in his own right and for other companies while he was at AGI but eventually he accepted that any such business activity was restricted to one occasion in respect of which everyone at AGI and AMIL was fully informed.

[124]Mr Wilson described a number of matters where he said he was let down by AGI and by Mr Malizia. Mr Wilson said that all, or most, of the business done by AGI was generated by his work. He described what he called “the Saab deal”. This potentially involved Saab, AMIL and Aerostar SA. The deal did not proceed and Mr Wilson blamed the fact that AMIL or AGI owed a substantial sum of money to Aerostar SA. That deal broke down in late February 2007.

[125]Mr Wilson described his involvement in the negotiations with Romaero and with Galaxy. He said that Mr Ashfield was an old friend of his. After the Saab deal broke down in late February 2007, Mr Ashfield came to Mr Wilson’s home and said that Mr Ashfield did not want to work with AMIL but would work with Mr Wilson. It was Mr Ashfield, rather than Mr Wilson, who set up the new AMIL and created the bank accounts with HSBC.

[126]Mr Wilson said that AMIL would not have been able to obtain the contracts with Romaero and Galaxy for itself. He gave various reasons for that. He said that the contracts were subject to the agreement of Mr Ashfield and he would not have agreed to AMIL having the benefit of these contracts. Further, Romaero would not have worked with AMIL in view of the fact that Romaero was owed some $60,000 by another company connected with Mr Kyme and Mr Malizia. Mr Wilson said that Mr Popic of Romaero had said that Romaero would never do business with AMIL because of the sum of $60,000 owed to Romaero by a company associated with AMIL.

[127]Mr Wilson also said that Mr Ashfield had to give a personal guarantee to Romaero in relation to the contract between the new AMIL and Romaero and he would not have given his guarantee if the old AMIL had been involved. Further, he said that AMIL did not have the necessary approvals for the work which was to be done.

[128]Mr Wilson tried to say that the negotiations for the proposed contracts were between AMIL and Mr Ashfield’s company but eventually he accepted that, as the documents clearly showed, AMIL was in negotiation with both Romaero and with Galaxy.

[129]Mr Wilson stated that he did not have any involvement in the formation of the new company until he became aware of it in late March 2007. Mr Wilson described what Mr Ashfield’s position was in March 2007. He said that Mr Ashfield was doing more than encouraging Mr Wilson to take the contracts for himself, through a new company, he was pressing Mr Wilson to do so.

[130]In his witness statement, Mr Ashfield said that Mr Popic of Romaero had said in early 2007 that Romaero would not work with AMIL unless the debt of some $60,000 owed to Romaero was cleared. It is clear from the context that early 2007 is a reference to January 2007. Mr Ashfield confirmed in cross-examination that he was referring to early January 2007. Mr Ashfield said that he confronted Mr Malizia about this and Mr Malizia said that he would not pay Romaero anything. Mr Ashfield then said that caused him to make up his mind that he did not want to have anything to do with Mr Malizia and AMIL.

[131]Mr Ashfield said that he was contemplating financing the deal with Galaxy by giving a personal guarantee. If Mr Ashfield is referring to the guarantee he gave in April 2007, then his evidence can be accepted. However, I doubt that Mr Ashfield had such a thought in mind before 5th March 2007, which is the impression he was trying to give in his witness statement.

[132]Mr Ashfield also gave reasons why it would not have been possible for AMIL to be involved in the transaction. However, all of the reasons for AMIL not being able to be involved would also seem to apply to Avman. If Mr Ashfield is saying that it was necessary that he, Mr Ashfield, should also be involved, he may be right about that. But to my mind, there was no real distinction between AMIL and Avman in relation to the suggested difficulties in participating in the transaction.

[133]In his witness statement, Mr Ashfield stated that Mr Malizia said that he would not accept a penalty clause dealing with the event of late completion. He repeated that evidence in cross-examination. His oral evidence on this point was unconvincing.

[134]In his witness statement, Mr Ashfield referred to “recruiting” Mr Wilson. On a number of occasions in the course of his cross-examination, Mr Ashfield described how he was trying to “lure” Mr Wilson to join Avman. Mr Ashfield said that he did not think that Mr Wilson was “contracted” to AGI because he carried on other business activities outside AGI. In fact, in no real sense did Mr Wilson carry on any business activities outside AGI. Mr Wilson and Mr Ashfield were very old friends and I find it difficult to believe that Mr Ashfield did not know the true facts, rather than the facts alleged in this part of his witness statement. Mr Ashfield stated that Mr Wilson was reluctant to join Mr Ashfield and he described the steps which he took to bring Mr Wilson into the deal. He said he was “head hunting” Mr Wilson and he had no idea that this contravened any law.

[135]As to the incorporation of Avman, Mr Ashfield stated that he caused that to happen, initially without informing Mr Wilson. The position was the same in relation to the bank accounts for Avman. When the new email addresses were set up, on or before 1st April 2007, Mr Ashfield says that Mr Wilson was at that time “head hunting” Ms Harriss.

[136]Mr Ashfield described how he paid off a debt which Mr Wilson had taken on, in order to introduce funds into AMIL, and having given his motorbikes and a car as security. Mr Ashfield did this as an incentive to Mr Wilson to join Avman. Mr Ashfield gave an undertaking to Mr Wilson, before Mr Wilson committed himself to joining Avman, to pay off this debt and the debt was in due course paid off, probably after the contracts were entered into with Romaero and Galaxy.

[137]When cross-examined, Mr Ashfield accepted that he knew (from at the latest December 2006) that Mr Wilson was a director of AMIL. Mr Ashfield accepted that he knew that employees had “a duty” to their company but he did not think that that applied to Mr Wilson and AMIL because of Mr Wilson’s wider business activities. I have already held that Mr Wilson did not in substance have any relevant wider business activities and I would reject Mr Ashfield’s evidence that he had had reason to think, or that he did in fact think, that Mr Wilson’s behaviour would be compatible with his duties to AMIL.

[138]In his witness statement, Mr Ashfield stressed that the decision about Galaxy or PLA entering into the transaction was a decision for him alone.

[139]In his witness statement, Mr Ashfield explained that he incorporated Avman so that it had the same initials as AMIL. He wanted to give the impression on the face of the documents that nothing had changed and that no new company had been introduced. He therefore intended that Romaero and Galaxy would both think that they were still dealing with AMIL. That is consistent with the misleading explanation he gave to Romaero on 13th April 2007 and the evidence given by Captain Seddigh (to which I will refer) indicating that Captain Seddigh thought that the new AMIL was simply a change of name from the old AMIL. When cross-examined, Mr Ashfield said that he had told Galaxy before the contract was signed with Galaxy that Avman was different from AMIL. He was wholly unable to say when this happened. This evidence appears to be inconsistent with his own witness statement and my reading of Captain Seddigh’s witness statement. I reject the evidence which Mr Ashfield put forward in cross-examination. This passage in the cross-examination also contributed to my conclusion that I must treat Mr Ashfield’s evidence with considerable caution.

[140]The Defendants served a witness statement from Captain Seddigh. He did not come to court to give oral evidence and I admitted his statement under the Civil Evidence Act 1995. Captain Seddigh spoke of his long business association with Mr Ashfield and the extent to which he relied on Mr Ashfield in connection with the arrangements in issue in this case. When he came to describe the company which had been introduced into the arrangements and with whom Galaxy was to contract, he said:

“originally that company was called AMIL but is now called Avman”

. The witness statement appears to proceed on the basis that there was only ever one company involved in this way. I interpret Captain Seddigh’s statement as saying the same party was involved throughout and that what happened was that AMIL changed its name. On this basis, it is clear that Captain Seddigh was never told that a new company, albeit with the same initials, had been created and introduced into the arrangments. Captain Seddigh therefore believed that he was still dealing with the party to whom he was originally introduced, namely, AMIL.

[141]In her witness statement, Ms Harriss recounted how Mr Wilson had told her before he left AGI that he had had enough of being lied to and misled and working extremely hard only for the money which he earned for the company to go to someone else. He often told her that he disliked working for AGI and that he was working for nothing.

[142]Having recounted the evidence I was given on various relevant topics, I can now make my findings of fact on the parts of that evidence that are in issue.

[143]I find that neither Mr Wilson nor Mr Ashfield told Galaxy that Galaxy was entering into a contract with a different company from the company it had been negotiating with. I find that Galaxy believed that it was contracting with AMIL and not with a different entity.

[144]I find that neither Mr Wilson nor Mr Ashfield told Romaero that Romaero was entering into a contract with a different company from the company it had been negotiating with. I find that Romaero believed that it was contracting with AMIL and not with a different entity.

[145]I do not accept the evidence of Mr Wilson and Mr Ashfield that Romaero had said that it would not contract with AMIL unless it was paid the sum of approximately $60K owed to it by Aviation Maintenance International Limited. Romaero sent its email of 23rd February 2007 in which it sought payment of the debt but there is no sign in the documents that Romaero followed up its request. I accept Mr Malizia’s evidence that neither Mr Wilson nor Mr Ashfield told him that Romaero would not contract with AMIL without payment of this debt. Further, AMIL never did pay the debt nor offer to pay the debt and Romaero did enter into the intended contract when it believed, I find, that it was still dealing with AMIL. That was why Mr Ashfield told Romaero on 13th April 2007 that the new company was formed to keep funds separate. There was no suggestion there that the original AMIL had stopped being involved in the arrangments. Mr Ashfield’s explanation in the email is not that the old AMIL has fallen away and that Romaero is now dealing with an entirely new company; rather, the new company was introduced simply for the ease of keeping monies separate.

[146]It was suggested by Mr Wilson and Mr Ashfield that AMIL would not have entered into a contract with Galaxy, in the same terms as the contract between Avman and others and Galaxy, because AMIL would never have agreed to the penalty clause which was contained in the actual contract. It was further suggested that because Galaxy would have insisted on such a penalty clause, the negotiations between AMIL and Galaxy would have broken down. I do not accept those suggestions. I accept Mr Malizia’s evidence that AMIL would have accepted a penalty clause in the same terms as the clause in the contract ultimately entered into by Avman.

[147]It was suggested by Mr Ashfield that AMIL would not have entered into a contract with Galaxy, in the same terms as the contract between Avman and others and Galaxy, because AMIL needed working capital which it simply did not have and could not procure. In fact, the working capital needed by AMIL or Avman for that matter, was to be provided under the funding provisions of the contract with Galaxy. I see not reason why AMIL was at any disadvantage, as compared with Avman, in its ability to take on a contract in those terms.

[148]Although Mr Wilson submitted that the history of his dealings with AGI/AMIL, and the history of the dealings between Mr Malizia and Mr Kyme with AGI/AMIL, had resulted in Mr Wilson’s duties as a director being relaxed so that he was free to act in conflict with AGI/AMIL and/or take for his own benefit business opportunities which belonged to or were being pursued by AMIL, I find that that there was nothing in the history of Mr Wilson’s involvement with AGI/AMIL or, indeed, the involvement of Mr Malizia or Mr Kyme with AGI/AMIL, which would serve to reduce the duties of Mr Wilson as a director of AMIL below the duties owed in normal circumstances by a director of AMIL.

[149]Consistently with my finding in the last paragraph, I also find that there was no basis in fact for Mr Ashfield to believe that the course of dealings of AGI/AMIL with its directors had served to reduce the duties of Mr Wilson as a director of AMIL below the duties owed in normal circumstances by a director of AMIL.

[150]I find, consistently with the evidence of both Mr Wilson and Mr Ashfield, that Mr Ashfield put significant pressure on Mr Wilson and induced Mr Wilson to act as Mr Wilson did act. In particular, Mr Ashfield orally persuaded Mr Wilson to take up his position at Avman and to procure Avman to enter into the relevant contracts in place of AMIL. Further, Mr Ashfield facilitated Mr Wilson’s conduct by setting up Avman and arranging bank accounts and email addresses. Further, Mr Ashfield paid off Mr Wilson’s debt to Mr Thompson, and thereby obtained the release of the motor bikes and the car from being charged, as a major inducement to Mr Wilson to go along with Mr Ashfield’s proposals.

[151]I have considered why Mr Ashfield acted in the way that he did. In the course of his evidence, Mr Ashfield said that he stood to make a lot of money out of the deal with Galaxy. I asked him to explain how that would come about, particularly in view of his evidence that he had agreed to forego any interest in the profit on the sub-sale of the aircraft to Galaxy. I did not find his explanation of the various ways in which he stood to profit particularly revealing. I do not think that Mr Ashfield really explained all of his thinking at the time. In these circumstances, I will do the best I can to explain what led Mr Ashfield to take the positive step of persuading Mr Wilson to substitute Avman for AMIL in the proposed contracts. I find that there were a number of influences on Mr Ashfield’s behaviour. It is not easy to disentangle all of these influences or to say which were the more significant influences. In any event, I find that Mr Ashfield’s behaviour was in the end caused by these influences operating in conjunction upon him. One influence was that Mr Ashfield did not respect the abilities of Mr Malizia and Mr Kyme whereas he did respect the abilities of Mr Wilson. For that reason, it suited Mr Ashfield to do business with Mr Wilson alone. Another influence was that Mr Ashfield preferred Mr Wilson to benefit from the contracts rather than having to share the benefits with Mr Malizia and Mr Kyme. Although I am less sure about this, I find on the balance of probabilities that another influence was that Mr Ashfield believed that he could himself (or through one of his companies) participate in the profits from the transactions and it would be easier for him to negotiate a larger cut of the profits if he was negotiating with Mr Wilson alone, rather than with AMIL.

[152]I have also considered what Mr Ashfield would have done if Mr Wilson had not agreed to his proposals. I find that Mr Ashfield would have proceeded on his original course of bringing together AMIL, Galaxy and Romaero. If Mr Wilson had continued as director of AMIL and performed his duty to win the contracts on behalf of AMIL, then Mr Ashfield would not have had the alternative of contracting with some other company controlled by Mr Wilson. I do not believe that Mr Ashfield would have taken the benefit of the contracts from AMIL and arranged for them to be awarded to some other unconnected company, if Mr Wilson had remained with AMIL. Further, there was no other company with whom Mr Ashfield could readily place the contracts. By March 2007, the negotiations with Romaero and Galaxy were very far advanced and those companies were negotiating with, and prepared to contract with, AMIL. Mr Ashfield explained in his witness statement that he formed the new company so that it had the same initials as AMIL to avoid upsetting the negotiations. Mr Ashfield did not tell Romaero or Galaxy that he and Mr Wilson were substituting a new contracting party for AMIL.

[153]Accordingly, in relation to the submission by the Defendants that Mr Ashfield’s company, PLA, would not have entered into the agreement with Romaero and Galaxy, I conclude that PLA would have done so if Mr Wilson had not been prepared to divert the proposed contracts from AMIL. The obligations undertaken by PLA in the agreement with Romaero and Galaxy were obligations which reflected the fact that Mr Ashfield and PLA were, certainly so far as Galaxy was concerned, acting as the seller of the aircraft to Galaxy.

[154]As regards the guarantee given by Mr Ashfield, AMIL does not seem to allege that Mr Ashfield would have given that guarantee if the contracts had been with AMIL rather than with Avman. AMIL’s case was that AMIL would have procured that guarantee from another source, possibly a bank, and possibly with the bank being supported by an undertaking from Mr Reeves. In my judgment, I find that AMIL would have procured a guarantee which would have satisfied Galaxy. In the absence of any evidence to the contrary, the terms of that guarantee would probably have been the same as the terms of the guarantee given by Mr Ashfield. In coming to my conclusion on this point, I am influenced by the fact that the guarantee was not a particularly onerous obligation in circumstances where Galaxy was providing the working capital for AMIL to perform its obligations under the proposed contracts and the purpose of the guarantee was to ensure that AMIL spent the monies advanced by Galaxy on the matters on which those monies should be spent pursuant to the terms of the contract between AMIL, Romaero and Galaxy.

The claim against Mr Wilson

[155]In these proceedings, AMIL alleges that Mr Wilson was in breach of his fiduciary duties to AMIL, which were owed by him as a director of AMIL. AMIL further contends that Mr Wilson was in breach of his obligations as an employee of AMIL.

[156]As regards the case based on the duties of a director of AMIL, it was accepted by the end of the trial that Mr Wilson had been, and continued to be, a director of AMIL until 1st May 2007. In its particulars of claim AMIL pleaded that Mr Wilson owed certain fiduciary duties to AMIL. These included a duty to act in good faith, not to make a profit out of his position as a director, not to place himself in a position where his duty to AMIL and his own interest (or his duties to others) might have conflicted or did conflict, not to misapply AMIL’s property, and to act in the best interests of AMIL and for proper purposes. At the end of the trial Mr Wilson accepted that he did owe those fiduciary duties to AMIL.

[157]At the end of the trial, it was accepted that Mr Wilson had been an employee of AMIL. In its particulars of claim, AMIL pleaded that it was an implied term of Mr Wilson’s contract of employment with AMIL that Mr Wilson would act in good faith and with fidelity to AMIL and that he would not use any confidential information which he obtained by reason of and during the course of his employment. By the end of the trial, Mr Wilson accepted that he was subject to those implied obligations under his contract of employment with AMIL.

[158]The next question is whether Mr Wilson conducted himself in relation to the negotiations with Galaxy and Romaero in a way which was in breach of his fiduciary duties as a director of AMIL and in breach of his obligations as an employee of AMIL.

[159]Based on my findings of fact, the answer to the question in the last paragraph is plainly “yes”. As regards his fiduciary duties, Mr Wilson did not act in good faith, he sought to make a profit out of his position as a director, he placed himself where his duty to AMIL and his own interest conflicted and he did not act in the best interests of AMIL. Similarly, as regards his duties as an employee, Mr Wilson did not act in good faith and used information he had as an employee of AMIL for his own purposes.

[160]Mr Wilson did not argue that he had a defence to these claims as a result of any allegation that AMIL gave its informed consent to his conduct. No such defence was pleaded by Mr Wilson. Although I have found that Mr Wilson told Mr Kyme in early April 2007 of his intentions, he did not tell anyone else who was acting on behalf of AMIL. In particular, Mr Wilson did not have the informed consent of the shareholders of AMIL at a general meeting, nor was his conduct permitted by any provision in the articles of association of AMIL: see how the matter was put by the High Court of Australia in Furs Ltd v Tomkies

(1936) 54 CLR 583

at 592, cited in Northstar Systems Ltd v Fielding

[2005] EWHC 1638 (Ch)

at [1319].

[161]AMIL also alleges that Mr Wilson is liable in the tort of conspiracy, having combined with Mr Ashfield and with Avman, with intent to cause injury to AMIL. The alleged unlawful means are the breaches by Mr Wilson of his fiduciary duties as a director and his obligations as an employee. Because Mr Wilson is primarily liable for those breaches, it is not necessary for the purpose of assessing his liability to AMIL to consider whether he is also liable in the tort of conspiracy. The tort of conspiracy is relevant in this case to identify persons who are secondarily liable with Mr Wilson and I will return to the allegations of conspiracy when I consider the position of Mr Ashfield and of Avman.

The claim against Mr Ashfield

[162]I turn then to consider the position of Mr Ashfield. It is said that Mr Ashfield is liable to AMIL in tort for:(1) inducing or procuring breaches by Mr Wilson of his contract of employment with AMI; and

(2) for conspiring with Mr Wilson (and Avman) to injure AMIL by unlawful means. It is also said that Mr Ashfield is liable to AMIL for dishonest assistance given to Mr Wilson in the commission by Mr Wilson of the breach of his fiduciary duties to AMIL. I will first consider the two claims in tort against Mr Ashfield before I consider the claim for dishonest assistance.

[163]The ingredients of the tort of inducing or procuring a breach of contract are, first, there must be a contract, second, there must be a breach of that contract, thirdly, the conduct of the relevant defendant must have been such as to procure or induce that breach, fourthly, the relevant defendant must have known of the existence of the relevant term in the contract or turned a blind eye to the existence of such a term and, fifthly, the relevant defendant must have actually realised that the conduct, which was being induced or procured, would result in a breach of the term. I take these propositions from the decisions of the House of Lords in OBG Ltd –v- Allan

[2008] 1 AC 1

per Lord Hoffmann at [39]-[44] and per Lord Nicholls at [191]-[193] and [202].

[164]I have already held that Mr Wilson had a contract of employment with AMIL and that the conduct complained of amounted to a breach of that contract. I have also held, when making my findings of fact, that Mr Ashfield did induce or procure the conduct of Mr Wilson which amounted to a breach of his contract.

[165]I next consider whether Mr Ashfield had sufficient knowledge that, under Mr Wilson’s contract with AMIL, Mr Wilson was obliged to act in good faith and with fidelity to AMIL. It is convenient to take this point together with the next question: did Mr Ashfield realise that Mr Wilson’s conduct would amount to a breach of his contract with AMIL? In my judgment, the answer to these questions emerges most clearly from the exchange of emails between Mr Wilson and Mr Ashfield on 5th March 2007. In that exchange, Mr Wilson plainly was saying that the conduct which Mr Ashfield was urging on him was “doing the dirty” and was not “correct”. Mr Ashfield did not say anything to disagree with that assessment but sought instead to justify “doing the dirty” by asserting that Mr Malizia and Mr Kyme had “done the dirty” earlier on Mr Wilson. In my judgment, it is proper to find on the basis of this exchange of emails that Mr Ashfield did know that Mr Wilson’s proposed conduct would be contrary to Mr Wilson’s obligations owed to AMIL. Mr Ashfield told me that he did not think he was doing anything unlawful or dishonest although he seemed prepared to accept that his conduct might be judged differently if one imposed a moral standard rather than a legal standard.

[166]My conclusion is that AMIL has established that Mr Ashfield committed the tort of inducing or procuring a breach of contract by Mr Wilson.

[167]The second tort alleged against Mr Ashfield is that he and Mr Wilson (and indeed Avman) conspired together to injure AMIL by unlawful means. The tort of conspiracy has two branches. One branch of the tort requires a claimant to show that the relevant defendant acted with the predominant purpose of injuring the claimant. That branch of the tort is not relied on in this case. The Claimant relies on the alternative way of establishing the tort of conspiracy, by showing that it has suffered loss or damage as a result of unlawful action taken pursuant to a combination or agreement between the relevant defendant and another person or persons to injure it by unlawful means: see Kuwait Oil Tanker –v- Al Bader [2002] All ER (Comm) 271 at 311. Accordingly, there must be a combination, to carry out unlawful acts, which are the means by which injury is intended to be inflicted; there must be an intention to injure AMIL and there must be resulting loss and damage.

[168]I will deal first with the alleged combination. It is clear that Mr Wilson and Mr Ashfield combined to do whatever they did in relation to their conduct in the negotiations with Galaxy and Romaero. I will consider the position of Avman separately later.

[169]The next question is whether the conduct of Mr Wilson and Mr Ashfield involved unlawful acts. AMIL says that there were unlawful acts namely the breaches of fiduciary duty by Mr Wilson and the breaches of contract by Mr Wilson.

[170]Ms Ife submitted that a breach of fiduciary duty is an unlawful act for the purpose of the tort of conspiracy to injure by unlawful means. She showed me decided cases that proceeded on that basis. In the course of argument, I raised the question as to the desirability, in a case where there was a breach of fiduciary duty, of there being two different sets of principles as to the liability of an accessory who has assisted the breach, the first set being the equitable principles as to accessory liability and the second set, possibly, being the tort of conspiracy to injure by unlawful means; I had in mind the doubts expressed on that score by Slade LJ in Metall & Rostoff v Donaldson Inc

[1990] 1 QB 391

at 481G.

[171]Ms Ife also submitted that a breach of contract is an unlawful act for the tort of conspiracy to injure by unlawful means. She showed me decided cases which proceeded on that basis. In the course of argument, I was concerned as to the desirability of recognising a tort of conspiracy to commit a breach of contract alongside the tort of inducing a breach of contract when the two torts would not necessarily have the same ingredients.

[172]In view of the fact that it has generally been assumed in a number of cases that breaches of a fiduciary duty and breaches of contract are unlawful means for the tort of conspiracy to injure by unlawful means and because I have, in any event, already found Mr Ashfield liable in tort, I have reached the conclusion that I should follow the general approach and hold that such breaches are indeed unlawful means for the tort of conspiracy to injure by unlawful means. In due course, I will consider the position of Avman who was also alleged to have conspired with Mr Wilson and Mr Ashfield to injure AMIL. Because I will in due course hold Avman liable to pay equitable compensation to AMIL, it will not affect Avman’s overall liability if I proceed on the basis in its case, just as in the case of Mr Ashfield, that breaches of fiduciary duty and breaches of contract are unlawful means for the tort of conspiracy to injure by unlawful means.

[173]It is established that for there to be “unlawful means” there must be more than the existence of unlawful acts. The unlawful acts must be the means by which the loss is caused to a claimant: See Revenue and Customs Commissioners –v- Total Network SL [2008]1AC1174 at [95]-[96] per Lord Walker and at [119] per Lord Mance. In this case the question of instrumentality or means is clearly satisfied.

[174]That brings me to the requisite intention to injure for the tort of conspiracy to injure by unlawful means. In OBG Ltd –v- Allan

[2008] 1 AC 1

, the House of Lords considered the requisite intention for the tort of intentionally causing injury by unlawful means. The point is discussed by Lord Hoffmann at [62] and by Lord Nicholls at [164]-[165]. Lord Hoffmann distinguished between ends, means and consequences. He held that a person intends to cause loss even where his conduct is only intended to be the means by which he enriched himself. Conversely, a person is not liable for loss which is neither a desired end, nor a means of attaining a desired end, but merely a foreseeable consequence of one’s actions. Lord Nicholls’ speech is to the same effect.

[175]Based on my findings of fact in this case, I am satisfied that Mr Ashfield had the requisite intention to injure AMIL. Mr Ashfield intended to benefit Mr Wilson/Avman and he also intended to benefit himself. The injury to AMIL was the other side of the coin to such benefits and, in law, was therefore intended by Mr Ashfield.

[176]A combination to injure by unlawful means is only actionable if the victim suffers loss and damage. In my judgment, the victim in this case did suffer loss and damage. If there had been no conspiracy, then AMIL would have entered into the proposed contracts with Romaero and Galaxy. The conspiracy caused it to lose the benefit of those contracts.

[177]My conclusion is that AMIL has established that Mr Ashfield committed the tort of conspiracy to injure AMIL by unlawful means.

[178]I next consider AMIL’s claim that Mr Ashfield dishonestly assisted a breach of trust (or a breach of fiduciary duty) on the part of Mr Wilson. There was no real dispute between the parties as to the legal principles as to liability for dishonest assistance. Lewin on Trusts, 18th ed., at para. 40.09, identifies four requirements for dishonest assistance. The first is that there is a trust; the second is that there is a breach of trust by the trustee; the third is that the relevant defendant induces or assists that breach of trust and the fourth requirement is that the relevant defendant does so dishonestly. As to the first requirement, although it refers to a trust, it is clearly established that fiduciary obligations in relation to the property of another person come within the reference to a trust. I will therefore apply those four requirements to the circumstances of this case.

[179]As to the first requirement for dishonest assistance in a breach of trust, this is satisfied. Mr Wilson owed fiduciary obligations to AMIL in relation to the business opportunity which AMIL had to enter into contracts with Romaero and Galaxy.

[180]As to the second requirement, I have already held that Mr Wilson committed a breach of his fiduciary obligations to AMIL.

[181]The third requirement is that Mr Ashfield induced or assisted the breach of fiduciary duty. This is clearly established. I have referred above to my findings that Mr Ashfield induced or procured a breach by Mr Wilson of his contract of employment with AMIL and the same findings produce the same result here also.

[182]The fourth requirement for dishonest assistance in a breach of trust is that the relevant defendant was dishonest.

[183]The legal test for dishonesty in this context has been much discussed. The principal authorities are the decisions of the Privy Council in Royal Brunei Airlines v Tan

[1995] 2 AC 378

, of the House of Lords in Twinsectra Ltd –v- Yardley

[2002] 2 AC 164

and of the Privy Council in Barlow Clowes International Ltd –v- Eurotrust International Ltd

[2006] 1 WLR 1476

. The two decisions of the Privy Council represent the law to be applied in this jurisdiction: see Abou-Rahmah –v- Abacha [2007] 1 All ER (Comm) 827 at [66] – [70].

[184]The test as to dishonesty, distilled from the above authorities, is as follows. Dishonesty is synonymous with a lack of probity. It means not acting as an honest person would in the circumstances. The standard is an objective one. The application of the standard requires one to put oneself in the shoes of the defendant to the extent that his conduct is to be assessed in the light of what he knew at the relevant time, as distinct from what a reasonable person would have known or appreciated. For the most part dishonesty is to be equated with conscious impropriety. But a person is not free to set his own standard of honesty. This is what is meant by saying that the standard is objective. If by ordinary objective standards, the defendant’s mental state would be judged to be dishonest, it is irrelevant that the defendant has adopted a different standard or can see nothing wrong in his behaviour.

[185]Based on my findings of fact, Mr Ashfield did act dishonestly when he assisted or procured breaches of fiduciary duty by Mr Wilson. A considerable insight into Mr Ashfield’s state of mind is given by the exchange of emails with Mr Wilson on 5th March 2007. I find that Mr Ashfield did appreciate that Mr Wilson was “doing the dirty” on AMIL and that such conduct was not “correct”. Mr Ashfield may have felt that AMIL should be treated that way because Mr Malizia and Mr Kyme had “done the dirty” earlier on Mr Wilson. Mr Ashfield came close to accepting that Mr Wilson’s conduct would not be morally right although Mr Ashfield felt that he (Mr Ashfield) was not acting dishonestly. If Mr Ashfield felt that Mr Wilson’s conduct was morally wrong, then in my judgment, it was dishonest of him to induce that conduct. Even if Mr Ashfield did not feel that he was acting dishonestly, applying ordinary standards of honesty to the circumstances known to Mr Ashfield, I find that Mr Ashfield behaved dishonestly.

[186]My conclusion is that AMIL has established that Mr Ashfield dishonestly assisted the breaches of fiduciary duty committed by Mr Wilson.

The claim against Avman

[187]AMIL puts its case against Avman in three different ways. First, it says that Avman conspired with Mr Wilson and Mr Ashfield to injure AMIL by unlawful means. Secondly, it says that Avman knowingly received property subject to a trust in favour of AMIL. Thirdly, it says that Avman dishonestly assisted Mr Wilson in committing a breach of fiduciary duty owed to AMIL.

[188]The first way in which AMIL puts its case against Avman is to say that Avman conspired with Mr Wilson and Mr Ashfield in the relevant respects. I have already considered the ingredients of the tort of conspiracy and how those ingredients applied in relation to the conduct of Mr Ashfield (and Mr Wilson).

[189]The first question in relation to Avman and the tort of conspiracy is whether Avman was a party to any relevant combination. There is no barrier in the law to a finding that a company and its managing director have conspired together. I have already held that Mr Wilson and Mr Ashfield acted in combination. I also hold that Avman acted in combination with Mr Wilson and Mr Ashfield. The combination between Mr Wilson and Mr Ashfield seems to have started around 5th March 2007 and became firmed up as time went by. Avman could not have joined any such combination before Avman existed but by April 2007 when Avman was putting forward itself as a future contracting party with Romaero and with Galaxy, I find that Avman was part of the combination. The combination continued until Avman entered into the contracts with Romaero and with Galaxy at various dates in April 2007.

[190]When I considered the claim in conspiracy against Mr Ashfield, I considered the other ingredients of the tort of conspiracy, namely, whether there were unlawful acts, whether there were unlawful means, whether there was an intention to injure and whether the combination caused loss and damage to AMIL. The considerations discussed there apply also to the case of Avman, although I need to consider separately the question of intention on the part of Avman. In my judgment, the intentions of Mr Wilson in the relevant respects are to be imputed to Avman. Mr Wilson intended to benefit himself at the expense of AMIL and that is, in law, a sufficient intention to injure AMIL.

[191]I conclude that all the ingredients of a conspiracy to injure AMIL by unlawful means are established against Avman.

[192]The second way that AMIL puts its case against Avman is to say that Avman knowingly received property subject to a trust in favour of AMIL. AMIL says that it is entitled to receive from Avman the benefit to Avman of the property it received. There was no real dispute as to the principles to be applied as to liability for knowing receipt in such a case. The requirements are summarised in Lewin on Trusts, 18th ed., at para. 42-22. There must, first, be property subject to a trust; secondly the property must be transferred; thirdly, the transfer must be in breach of trust; fourthly, the property or its traceable proceeds must be received by the relevant defendant; fifthly, the receipt must be for the relevant defendant’s own benefit; and sixthly, the relevant defendant must receive the property with the knowledge that the property is trust property and has been transferred in breach of trust. As Lewin explains at para. 42-29, the requirement of knowledge requires the defendant to have sufficient knowledge to make it unconscionable to retain the benefit of the receipt of trust property.

[193]The first question I will consider in relation to this claim is whether Avman received something which was “property” for this purpose. Ms Ife relied on the analysis of the law in Northstar Systems Ltd –v- Fielding

[2005] EWHC 1638

(Ch) at [1487]-[1491]. Mr Ramsden did not suggest that this analysis was wrong. In these circumstances, I will apply the analysis of the law in that case. That means that the contracts entered into by Avman are to be regarded in law as the property of AMIL or the traceable proceeds of the property of AMIL which was the property consisting of the business opportunity available to AMIL to enter into such contracts.

[194]Applying that analysis as to the property of AMIL, or the traceable proceeds of the property of AMIL, for the purpose of the principles as to knowing receipt, there was a sufficient trust of that property by reason of Mr Wilson’s fiduciary obligations to AMIL. Further, that property was transferred to Avman. Yet further, I have held that the conduct of Mr Wilson amounted to a breach of his fiduciary obligations. This means that the property acquired by Avman, namely, its rights under the contracts it made with Romaero and Galaxy involved the receipt of either the property of AMIL or its traceable proceeds. The receipt was plainly for the benefit of Avman.

[195]As to Avman’s knowledge, at the time that Avman entered into the contract with Romaero and Galaxy, the knowledge of Mr Wilson is to be imputed to Avman and, as so imputed, Avman knew that the benefits of the contracts it was making were property, or the traceable proceeds of property, held subject to fiduciary duties and that there had been a breach of fiduciary duty in allowing or causing Avman to enter into those contracts. In these circumstances, in my judgment, it was unconscionable for Avman to receive and retain the benefit of the contracts.

[196]My conclusion is that AMIL has established that Avman is subject to a personal liability to AMIL for Avman’s knowing receipt of trust property.

[197]The third way that AMIL puts its case against Avman is to say that Avman dishonestly assisted Mr Wilson in committing a breach of his fiduciary duties. In one sense, this submission is a little unreal. It was Mr Wilson and Mr Ashfield who were responsible for the relevant conduct. They created Avman and negotiated on behalf of Avman for the contracts that Avman ultimately entered into. Nonetheless, treating Avman as a separate legal person from Mr Wilson and Mr Ashfield, it must follow, that Avman did assist Mr Wilson in his breach of fiduciary duty by allowing itself to be the vehicle he used to bring about his breach of fiduciary duty. When I considered the position of Mr Ashfield, I considered the other ingredients of the equitable wrong of dishonestly assisting a breach of fiduciary duty. My comments in relation to those matters apply again here in relation to Avman. However, it is necessary to consider separately whether Avman was dishonest in assisting Mr Wilson in the way that it did.

[198]The case for dishonesty on the part of Avman is that Mr Wilson was dishonest and his dishonesty is to be imputed to Avman. I find that Mr Wilson was dishonest. He knew that he was “doing the dirty” on AMIL and that his conduct was not “correct”. The fact that he may have persuaded himself (if he did) that Mr Malizia and Mr Kyme had “done the dirty” on him does not exempt him. By ordinary standards of honesty, he behaved dishonestly and his own views as to his behaviour, whatever those views were, are not material for this purpose.

[199]I conclude that AMIL has established that Avman is liable for dishonestly a breach of fiduciary duty by Mr Wilson.

Remedies

[200]Having considered the various ways in which it is alleged that Mr Wilson and/or Mr Ashfield and/or Avman are liable to AMIL, I next need to consider the remedies available to AMIL. The remedies potentially available are an order for an account, or equitable compensation, and/or damages for breach of contract and/or damages for tort.

An account

[201]In so far as Mr Wilson is liable to AMIL for breach of fiduciary duty, AMIL is entitled to an account of profits made by Mr Wilson resulting from the breach of fiduciary duty or, alternatively, AMIL is entitled to equitable compensation for losses incurred by AMIL by reason of the breach. AMIL is entitled to elect between these alternative remedies. Mr Wilson accepts that this is so but there is an issue as to the extent of Mr Wilson’s liability to account. Is Mr Wilson’s liability to account restricted to profits which he personally made or is he also liable to account for profits made by Avman.

[202]It is clear that Mr Wilson is, at least, liable to account for any profits he personally made from his breach of fiduciary duty. Accordingly, any benefits received by Mr Wilson through his shareholding in Avman would have to be brought into account. It is also accepted by AMIL that, in principle, Mr Wilson is not liable to account for profits made by a third party. AMIL accept that this is so in the light of the reasoning of Lewison J in Northstar Systems Ltd –v- Fielding

[2005] EWHC 1638 (Ch)

where the learned judge, basing himself on the decision of the House of Lords in Regal (Hastings) Ltd v Gulliver (1942)

[1967] 2 AC 134

n., declined to follow a wider basis of recovery propounded by Lawrence Collins J in CMS Dolphin Ltd –v- Simonet

[2001] 2 BCLC 704

. The decision in Northstar Systems Ltd was cited with approval in National Grid Electricity Transition PLC –v- McKenzie

[2009] EWHC 1817 (Ch)

. Although AMIL do not ask me to go beyond the basis of the liability identified in the Northstar Systems case, AMIL does submit that I should hold the profits made by Avman are to be treated as the personal profits of Mr Wilson because Avman is merely an alter ego of Mr Wilson and I can pierce the corporate veil of Avman.

[203]The question of when it is right to regard a limited company as the alter ego of an individual, in the present context of that limited company receiving benefits arising from a breach of duty to another company committed by a director of that other company, was considered in Trustor AB v Smallbone (No. 2)

[2001] 1 WLR 1177

. It was held that the court was entitled to pierce the corporate veil and recognise the receipt of a company as that of an individual in control of the company if the company was used as a device or façade to conceal the true facts thereby concealing or attempting to avoid any liability of that individual. The court referred to the well known cases of Gilford Motor Co v Horne

[1933] Ch 935

and Jones v Lipman

[1962] 1 WLR 832

as helpful illustrations of the type of case where it was appropriate to find that the company was used as a device or façade to conceal the true facts. The court in Trustor rejected submissions made to it as to a possible wider basis for permitting the receipt of the company to be recognised as the receipt of the individual in control of the company.

[204]On the facts of Trustor, the court held that the necessary conditions as to permitting the piercing of the veil of incorporation existed. A similar result was reached on the facts in the earlier case of Gencor ACP Ltd v Dalby

[2000] 2 BCLC 734

. In Trustor, the company had received monies and in Gencor the receipts by the company included the receipt of business opportunities.

[205]In the present case, I am asked to pierce the veil of incorporation of Avman so as to recognise the receipt by Avman of the business opportunity represented by the contracts with Romaero and Galaxy as, in truth, a receipt by Mr Wilson of that opportunity. At all material times, Mr Wilson has been the sole director and shareholder of Avman. One purpose for which Avman was formed was to have the benefit of limited liability in relation to the business to be carried on by Avman. It is, of course, commonplace for a company controlled by a single individual to be formed precisely for the purpose of having limited liability in relation to some business venture. The fact that the company is controlled by a single individual is not enough on its own to justify piercing the veil of incorporation. Another reason that Avman was formed was to create a company which was different from AMIL but which would, at least initially, have the same initials as AMIL. There was therefore an element of disguise in allowing Avman to pass itself off to Romaero and Galaxy as the same company as AMIL. However, no one says that I should pierce the veil of incorporation of Avman so as to identify it with AMIL. I plainly could not do that. Further, I do not see how Romaero or Galaxy could argue that they were entitled to pierce the veil of incorporation so as to identify Avman with Mr Wilson. This case does not possess the feature which persuaded the courts in Trustor or Glencor to pierce the veil, namely, that the company was formed to be the creature of the individual, and to disguise the fact that the individual was profiting, through his creature company, from his breach of duty to another company. In the present case, Mr Wilson did not take control of Avman for the purpose of pretending to AMIL that Avman was somehow different from Mr Wilson. In these circumstances, I conclude that it would not be right to recognise a receipt by Avman as a receipt by Mr Wilson personally so as to make him liable to account to AMIL for the profits attributable to such receipt. I have already held that Avman is liable to AMIL for knowing receipt of trust property and it will follow that Avman will be liable to account to AMIL for such profits

[206]As regards Mr Ashfield, because Mr Ashfield is liable for dishonestly assisting a breach of trust, then AMIL can claim an account of the profits which he has made as a result. The relevant profits are restricted to profits which Mr Ashfield personally made. It is not said that Avman was the alter ego of Mr Ashfield. I did not receive any submissions as to whether any companies, with which Mr Ashfield may have a connection, should be regarded as the alter ego of Mr Ashfield.

[207]As regards Avman, I have held that it is liable for knowing receipt and for dishonestly assisting a breach of fiduciary duty. Accordingly, it is liable to account for profits made as a result.

Equitable compensation

[208]In the alternative to AMIL’s entitlement to seek an account of profits from Mr Wilson, Mr Ashfield and Avman, AMIL is also, in the alternative, entitled to elect to claim equitable compensation for loss and damage if any has been caused to it by reason of the relevant wrongdoing.

[209]There is an issue as to whether the various actionable wrongs caused loss and damage to AMIL. For the purpose of assessing equitable compensation, it is necessary to ask what would have happened in relation to AMIL if the equitable wrongdoing had not occurred. AMIL’s case is straightforward. AMIL says that it would have obtained, for its benefit, contracts which would have been identical to those obtained by Avman with Galaxy and Romaero.

[210]There was some discussion at the trial as to precisely what rights Avman had under the relevant contract for the purpose of identifying what rights AMIL would have had if it had made the same contract. It does not seem to me that I need to explore those matters for present purposes. They may become relevant when considering what the benefits of the contracts amounts to when one is assessing equitable compensation. There was also a suggestion at the trial on behalf of AMIL that AMIL may have been able to secure other work in relation to aircraft engines and, if and insofar as that work is not covered by the contracts actually entered into by Avman, AMIL had a chance of negotiating a contract for engine work and it should be compensated for the loss of that chance. In my judgment, I should not grant relief to AMIL on the basis of that suggestion. A claim of that kind is not pleaded. Further, the evidence does not enable me to make a finding as to what that chance might have been and, in particular, what contract (and on what terms) might have been available to AMIL.

[211]The relevant defendants say that in the absence of the relevant wrongdoing, AMIL would not have managed to secure the contracts which Avman managed to secure. The relevant defendants make various detailed points. They say that AMIL would not have agreed to a penalty clause in the contract and without such a penalty clause, Galaxy would not have contracted with AMIL. I have already found, on the facts, that AMIL would have agreed the same penalty clause as was agreed between Avman and Galaxy.

[212]Next, the defendants say that Romaero would not have contracted with AMIL because of the debt owed to Romaero by Aviation Maintenance International Limited. I have already found, on the facts, that the existence of this debt would not have affected the position.

[213]Next, the defendants say that Mr Ashfield would simply not have allowed AMIL to secure the contracts. I have already held, on the facts, that if Mr Wilson had not committed his breaches of fiduciary duty, Mr Ashfield would have proceeded as he began, leading to contracts between AMIL and Romaero and Galaxy.

[214]Finally, it is said that the contracts only came about because Mr Ashfield was prepared to give a guarantee to Galaxy and whether or not Mr Ashfield would have allowed AMIL to secure the contract in other circumstances, Mr Ashfield would not have been prepared to commit himself to a personal guarantee in a case where it was AMIL who was the contracting party. I have already found, on the facts, that AMIL would have procured a guarantee acceptable to Galaxy.

[215]I conclude that AMIL would have secured contracts with Galaxy and Romaero in the same terms as the contracts entered into by Avman. I need to elaborate that finding in certain detailed respects. In so far as the contracts placed obligations on PLA, I find that PLA would have taken on those obligations even if the contracts had been with AMIL rather than with Avman. I also find that Mr Ashfield would not have been expected to give his personal guarantee to Galaxy but that AMIL would have procured a guarantee acceptable to Galaxy and in the same terms as the guarantee given by Mr Ashfield. I also find that AMIL would have agreed with Mr Ashfield a split on the terms of the 75/25 split referred to in the email exchange of 20th February 2007.

[216]I now need to consider whether the loss suffered by AMIL for which it is to be compensated is the loss of the benefit of the contracts with Romaero and Galaxy or the loss of the opportunity of securing those contracts. In my judgment, the loss is the second of these. Accordingly, I need to consider whether it was certain or very nearly certain that AMIL would have secured those contracts. If so, AMIL should recover by way of compensation 100% of what it has lost by reason of being prevented from entering into those contracts. If, on the other hand, it was not certain or very nearly certain that AMIL would have secured those contracts but it nonetheless lost the opportunity of securing them, then I need to assess its chances of securing the contracts. I have already held, on the balance of probabilities that AMIL would have secured the contracts. However, I think there is some doubt as to whether AMIL would have been able to give a satisfactory guarantee to Galaxy to persuade Galaxy to advance the working capital to AMIL on which AMIL depended for the purpose of performing the contracts. My overall assessment is that AMIL had an 80% chance of being able to secure the contracts. It was that 80% opportunity which AMIL lost and for which it should receive compensation.

[217]As I recorded at the beginning of this judgment, I am not dealing with the quantification of compensation payable to AMIL. I have also recorded that the Defendants say that when compensation is quantified, it will emerge that the contracts which were diverted from AMIL were not profitable so that AMIL has in the event suffered no loss.

Common law damages

[218]I have held that Mr Wilson was in breach of his contract of employment with AMIL. He is therefore liable to pay damages to AMIL for breach of contract. For the purpose of assessing those damages, it is necessary to compare the position which AMIL are in with the position they would have been in if Mr Wilson had performed his contract.

[219]In view of my conclusions, expressed above as to whether AMIL would have entered in the proposed contracts with Romaero and Galaxy, it follows that I conclude that if Mr Wilson had performed his contract with AMIL, then AMIL would have had an 80% chance of securing the same contracts with Romaero and Galaxy as were entered into by Avman. It is the loss of that 80% chance which is to be compensated by an award of damages.

[220]I have held that Mr Ashfield and Avman are liable in tort to pay damages to AMIL. For the purpose of assessing those damages, it is necessary to compare the position which AMIL are in with the position they would have been in if the torts had not been committed.

[221]In view of my conclusions, expressed above as to whether AMIL would have entered in the proposed contracts with Romaero and Galaxy, it follows that I conclude that if the torts had not been comitted, then AMIL would have had an 80% chance of securing the same contracts with Romaero and Galaxy as were entered into by Avman. It is the loss of that 80% chance which is to be compensated in damages.

[222]I am not asked to quantify the amount of damages payable. I have already recorded the case that will be put forward by the Defendants to the effect that AMIL has suffered no loss because the contracts diverted from it were not profit making.

PART III: THE GLOBESPAN CLAIMS

[223]There are two claims which relate to dealings with Globespan and which I have called the Globespan claims. The first of these claims is made by AMIL and is for the sum of £10,197.63. The second of these claims is made by CAS and is for $85,000 or the sterling equivalent. Both claims are made against Mr Wilson on the basis that he took from AMIL or CAS, as the case may be, the sums in question which belonged to AMIL or CAS, as the case may be, at a time when he had no entitlement to these monies. The claims are also made against Ms Harriss on the basis that she broke her duties to AMIL and CAS by assisting Mr Wilson to act in this way. It is not suggested that Ms Harriss obtained any benefit for herself out of her involvement in these matters.

[224]AMIL’s claim is a straightforward one and is explained as follows. AMIL entered into a contract with Globespan to arrange for work to be done on two aircraft owned by Globespan. As part of that work, AMIL procured refuelling of the two aircraft at the cost to AMIL of $17,150.55. Globespan was liable to reimburse this sum to AMIL. AMIL sent Globespan an invoice for £10,197.63, which was the sterling equivalent of $17,150.55. Globespan duly paid AMIL. Later, Ms Harriss raised a purported credit note for £10,197.63. This purported to show AMIL giving Globespan a credit for the sum it had already paid. This credit note was never sent to Globespan and Globespan was never given credit for this sum. The raising of the invoice followed by the credit note was for the purpose of creating the appearance, internally within AMIL, that it had not ended up with the benefit of the £10,197.63. What in fact happened was that £10,197.63 was credited to Mr Wilson’s loan account with AGI and Mr Wilson made withdrawals on that loan account.

[225]CAS’s claim is explained in a similar way. CAS raised an invoice to Globespan for $90,000. Globespan duly paid CAS $90,000. Later Ms Harriss altered the invoice by changing the $90,000 to $5,000. The altered invoice was never sent to Globespan. The sterling equivalent of $85,000, some £46,336.68 was credited to Mr Wilson’s loan account with AGI and Mr Wilson drew on his loan account.

[226]In their witness statements, Ms Harriss and Mr Wilson did not deal with the claim for £10,197.63 but they did deal with the claim arising from the invoice for $90,000. Further, the Defences served by Ms Harriss and Mr Wilson did not deal in any detail with the first of these claims. Ms Harriss was cross-examined about both claims and she gave detailed evidence about them.

[227]In relation to the claim for £10,197.63, Ms Harriss said that the invoice for that amount related to a purported supply of fuel to Globespan. She said that it had been explained to her by Mr Wilson that Globespan did not have to pay for this fuel. She said that she was asked nonetheless to raise an invoice for this amount which the directors of Globespan would approve and Globespan would pay. The directors would do this so that money could be taken out of Globespan. The monies received by AMIL would then be at the disposal of Mr Wilson for him to deal with in accordance with some agreement he had made with the directors of Globespan.

[228]In relation to the claim for $85,000, Ms Harriss said that she was asked by Mr Wilson to raise an invoice from CAS to Globespan for $90,000. The invoice should purport to be for work done by CAS in connection with the fitting of blended winglets to three aircraft. The $90,000 was to be calculated at the rate of $30,000 per aircraft. That work was never intended to be carried out and was not carried out. The directors of Globespan would authorise payment and Globespan would pay the invoice. The directors’ purpose was to take money out of Globespan. The $90,000 was duly paid. Ms Harriss then altered the invoice so that it read $5,000. That sum was duly credited to CAS. The balance of $85,000 was credited to Mr Wilson’s loan account with AGI.

[229]On the basis of Ms Harriss’s evidence, the defence put forward to both claims is that AMIL was never entitled to £10,197.63 and CAS was never entitled to $90,000. The money simply passed through those companies as a result of arrangements between Mr Wilson and the directors of Globespan. It is also said that Mr Malizia knew about these arrangements and approved of them.

[230]Mr Wilson did not deal with the £10,197.63 claim in his witness statement. When cross-examined he was rather vague about the relevant history. He was nowhere near as clear as Ms Harriss had been in her explanation. Mr Wilson’s evidence about the $85,000 claim was that the relevant invoice was simply to enable the directors of Globespan to take money out of the company.

[231]Mr Malizia denied any involvement in, or awareness of, the events relating to the £10,197.63 claim. As to the invoice for £90,000, he accepted in his witness statement that Mr Wilson had told him something about work involving the fitting of winglets to aircraft. He said that Mr Wilson told him that CAS could earn a small fee of $5,000 for assisting, in some way, with this work. He also said that Mr Wilson had told him at the same time that he would be “banking some funds” into AGI to be credited to his loan account, but this was unrelated to the winglet claim.

[232]There was also evidence of some of the other events surrounding the relevant invoices. There was an issue as to whether AMIL was ever entitled to charge Globespan for the fuel, which was the subject of the invoice. I was shown the contract between Aerostar SA, AMIL and Globespan. I was not shown any provision in it which expressly dealt with payment for fuel. As against that, I would not have been surprised to be shown that Globespan did have an obligation to pay for the fuel but I was not specifically shown the source of any such obligation. There was clear evidence that AMIL was obliged to pay Aerostar SA $17,150.55 for some fuel and the evidence strongly suggests that the payment was in relation to the two Globespan aircraft. In the light of the more general evidence to which I refer below as to the dealings between AMIL and Globespan, these facts are not necessarily inconsistent with an agreement between AMIL and the directors of Globespan that although Globespan would pay AMIL for the fuel, the amount would be remitted to the directors of Globespan as a reward for those directors introducing Globespan’s business to AMIL.

[233]There is also evidence as to withdrawals from Mr Wilson’s loan account shortly after the receipt of £10,197.63 from Globespan. There were four payments made out at Mr Wilson’s direction around that time. The sums in question were £1,636.36, £1,205.34, £3,500 and £3,500. The evidence as to the recipients of these payments is not complete but there is no specific evidence to show that the payments were made for the benefit, direct or indirect, of the directors of Globespan.

[234]There is clearer evidence as to withdrawals from Mr Wilson’s loan account shortly after he received £46,336.68, the sterling equivalent of $85,000. A payment of $30,000 was made to the German bank account of the wife of Mr Hughes, a director of Globespan. Mr Malizia signed the necessary approval to enable that sum to be paid to Mrs Hughes. Mr Wilson also gave evidence that some of the monies were paid to him so that Mr Newnham, another director of Globespan, could pay a sum due from Newnham to Mr Wilson for a motorbike which Mr Wilson had sold him. Mr Wilson was unable to produce any document of any kind which evidenced the sale of a motor bike.

[235]I also need to consider wider evidence as to dealings between AMIL and the directors of Globespan. In his witness statement, Mr Malizia explained that the contract between Aerostar SA, AMIL and Globespan was the first contract with Globespan and indeed, the first contract that AMIL was able to secure with anyone for maintenance work on aircraft in Romania. AMIL was very pleased indeed to have won this contract. It was agreed with the directors of Globespan that AMIL would charge Globespan £25 per man hour for the relevant work and the directors of Globespan would then invoice AMIL for so called commission of £10 per man hour. This is what in fact happened. Globespan paid at the rate of £25 per man hour. I have seen several invoices from Mr Hughes, a director of Globespan, for his “commission” and from a company associated with Mr Newnham, another director of Globespan, for his “commission”. Further, Ms Ife for the Claimants, when she was cross-examining Ms Harriss, accepted that Mr Malizia knew that AMIL had invoiced Globespan for £3,000, ostensibly for the work of fitting storage boxes to aircraft, and had then raised a credit note for that amount to enable AMIL to pay a “commission” to the directors of Globespan. It is therefore clear that Mr Malizia knew and approved of arrangements being made by Mr Wilson with the directors of Globespan to allow those directors to take money out of Globespan using false accounting documents from AMIL for that purpose.

[236]I can now come to my conclusions in respect of the two Globespan claims. I will deal first with the claim by CAS for $85,000, as this is the more straightforward claim. In my judgment, this money was never the property of CAS. It was paid to CAS pursuant to an arrangement between Mr Wilson and the directors of Globespan which would allow those directors to take money out of Globespan and so as to allow the money to be shared by the directors of Globespan and Mr Wilson. Accordingly, Mr Wilson has not deprived CAS of its money. If CAS had put its case on the basis that the money in question should never have left Globespan and that CAS was a constructive trustee of that money and that CAS sued as constructive trustee for the purpose of returning the money to Globespan, I would have had to consider such a claim for the purpose of assisting Globespan. That is now how CAS puts its case and I see no reason why I should treat CAS as having a legal title (although not a beneficial title) to the money in question in circumstances where it is clear that CAS intends, if it succeeded in its claim, to keep the money for itself.

[237]The position in relation to AMIL’s claim for £10,197.63 is less straightforward. The explanation put forward by Ms Harriss that AMIL was doing much the same as CAS was doing in relation to the monies it received from Globespan was not put forward in her witness statement or her defence. Although her oral evidence on the subject was clear, Mr Wilson’s was not. Further, there is reason to believe that AMIL was entitled to charge Globespan for the fuel. Nonetheless, I find that the position in this respect is not wholly clear and AMIL could have made it clear. Further, there is less clear evidence that the directors of Globespan benefitted from Mr Wilson’s subsequent withdrawals from the loan account.

[238]I am persuaded that I should accept the oral evidence of Ms Harriss on this point. I found her to be a straightforward witness. I found the oral evidence of Mr Malizia not very convincing. The burden of proof is on AMIL and it has to rely heavily on the integrity of its own invoice. However, on the evidence before me, it is clear that invoices were prepared within AMIL in a deliberately misleading way and that some of this, at least, was known to and approved of by Mr Malizia. Ultimately, I find that I have to choose between Ms Harriss’s account on this claim and the possibility that Mr Wilson took money from AMIL, to which he knew he was not entitled. In my judgment, it is much more probable that Mr Wilson was assisting the directors of Globespan to take money out of that company rather than he was stealing money from AMIL. There was no attempt made by Mr Wilson to cover his tracks within AMIL. On the contrary, the accounting documents showed clearly that he was taking the benefit by means of a credit to his loan account. My overall conclusion is that AMIL has not satisfied me on the balance of probabilities that it was entitled to the sum of £10,197.63 and that Ms Harriss was wrong when she explained that the invoice and credit note were part of an arrangement between Mr Wilson and the directors of Globespan. Accordingly, I find that AMIL is not entitled to be paid this sum by Mr Wilson or by Ms Harriss.

[239]Finally, in relation to the claim for £10,197.63, I am not at present satisfied that AMIL was effectively deprived of sum by Mr Wilson. That is because when Mr Wilson left AMIL, he had a sum standing to his credit in his loan account which exceeded £10,197.63. I was told that this credit was simply cancelled so that Mr Wilson has not received, and will not receive, the sum which stood to his credit. The loan account showed money owed to Mr Wilson by AGI, rather than AMIL. However, if the sum of £10,197.63 should never have left AMIL and should never have been treated as loaned by Mr Wilson to AGI, it would be a simple matter for AGI and AMIL to make the necessary accounting changes to restore the benefit of that sum to AMIL. In view of my earlier finding that AMIL has no basis for its claim against Mr Wilson, it is not necessary to consider this point any further.

[240]I therefore dismiss the two Globespan claims.

[241]I have made my decision in relation to the Globespan claims on the basis of the evidence put before me. I do not believe that I was told the full story in that evidence. Furthermore, I did not hear any evidence from Globespan, nor from its directors, nor from the various recipients of the sums of £10,197.63 or $85,000 which was taken out of Globespan. In addition, I was greatly disturbed by the evidence I heard about the “commissions” taken by the directors of Globespan in the various ways described in the evidence. I was also disturbed to note that Mr Malizia and Mr Wilson appeared to think that they had done nothing wrong in these respects. In my judgment, the facts which have come to light in the course of this trial should be made known to Globespan so that it can decide what course it should take. When I hand down this judgment, I will expect the parties to have available for the court information as to the present circumstances of Globespan so that the parties or the court can send a copy of this judgment to those in control of Globespan. I understood during the course of the trial that Globespan had been placed in administration. I also wish to raise with the parties the extent to which the documents in this case, which may have been disclosed as part of the process of disclosure of documents, should be available to Globespan for it to consider what to do.

Cited in 26 later judgments

and 17 more of the most senior